author: WALLACE, Circuit Judge: FERGUSON, District Judge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. John Merrill HALL, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. William King NICHOLS, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. James Kline DEVER, Defendant-Appellant.
    Nos. 72-1841, 72-1842, 72-1737.
    United States Court of Appeals, Ninth Circuit.
    Oct. 19, 1973.
    Ferguson, District Judge, dissented in part, with an opinion.

      John J. Flynn (argued), Thomas A. Thinnes, Richard L. Parrish of Flynn, Kimerer, Thinnes & Galbraith, Phoenix, Ariz., for appellant Dever.
    Benjamin Lazarow, (argued), Tucson, Ariz., for appellants Hall and Nichols.
    David S. Hoffman, Asst. U. S. Atty., (argued), William C. Smitherman, U. S. Atty., James M. Wilkes, Asst. U. S. Atty., Tucson, Ariz., for plaintiff-appel-lee.
    Before WRIGHT and WALLACE, Circuit Judges, and FERGUSON, District Judge.

       Honorable Warren J. Ferguson, United States District Judge, Central District of California, sitting by designation.

   WALLACE, Circuit Judge:

Hall, Nichols and Dever were convicted of possession of marijuana with intent to distribute in violation of 21 U.S.C. § 841(a)(1) and conspiracy to commit that offense in violation of 21 U.S.C. § 846. Appellants contend that the electronic surveillance of their radio-telephone conversations which led to their arrests violated the Communications Act of 1934 (particularly, 47 U.S. C. § 605), Title III of the Omnibus Crime Control and Safe Streets Act of 1968, and the Fourth Amendment. Therefore, they assert that the use of the conversations should have been suppressed. The district court was unpersuaded. We reverse.

Hall had radio-telephones installed in two automobiles. In early April, 1971, a Tucson housewife, who listens to her radio while doing housework, intercepted the appellants’ conversations on her eight-band, 150-170 megacycle radio. The radio is not unique. The public may purchase similar sets on the open market and can listen to police and fire broadcasts, calls placed over the telephone companies’ mobile telephone network, etc. After eavesdropping for less than a month, she reported what she considered to be suspicious conversations to the Arizona Department of Public Safety (DPS).

She continued to monitor the conversations and made reports to the DPS until at least May 21 when the DPS began its surveillance. Assuming that the period from the end of April until the 21st of May is not attributed to the DPS, there was still a five-week span until the appellants’ arrests on July 2 during which the DPS conducted warrantless electronic surveillance of their conversations which led to their arrests.

The arrests and convictions are inextricably bound to that warrant-less search and seizure of their conversations. That the state officers made the searches and arrests and then turned the case over to federal authorities for prosecution does not prevent the question from being raised. Benanti v. United States, 355 U.S. 96, 100, 78 S.Ct. 155, 2 L.Ed.2d 126 (1957). Therefore, affirmance of their convictions depends upon a determination of the validity of these searches.

I. Section 605.

With certain exceptions not pertinent here, 47 U.S.C. § 605 forbids any person to intercept and divulge wire or radio communications. In United States v. Sugden, 226 F.2d 281, 285 (9th Cir. 1955), aff’d per curiam, 351 U.S. 916, 76 S.Ct. 709, 100 L.Ed. 1449 (1956), we held “that unless the Congress orders otherwise” the exclusionary rule applies when non-FCC governmental agents or private individuals intercept non-public broadcasts without consent in violation of § 605. The first question before us is whether Congress has ordered otherwise.

Although only a few words were added to § 605 by the Crime Control Act, the legislative history of the Act clearly states that the amended section “is not intended merely to be a reenactment of section 605. The new provision is intended as a substitute.” S.Rep.No.1097, 90th Cong., 2d Sess., 1968 U.S.Code Cong, and Admin.News 2196. The legislative history also explicitly shows that Congress intended to exclude law enforcement officers from the purview of the new § 605. The Senate Judiciary Committee stated:

The new section is designed to regulate the conduct of communications personnel. It also provides that no person not authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. “Person” does not include a law enforcement officer acting in the normal course of his duties. But see United States v. Sugden (226 F.2d 281 (9th 1955), affirmed per curiam, 76 S.Ct. 709, 351 U.S. 916 [100 L.Ed. 1449] (1956)).

Id. at 2197 (emphasis added to text). It is obvious that the legislature wanted law enforcement personnel to be governed exclusively by Chapter 119 of Title 18. Therefore, because the critical communications were intercepted by the lawmen, § 605 offers no impediment. We need not reach the question of the involvement of the housewife.

II. Chapter 119 of Title 18.

Whether the challenged interception should be suppressed demands close scrutiny of the statutory requirements concerning wire and oral communications added by Title III of the Crime Control Act. See Chapter 119, 18 U.S.C. § 2510 et seq. If the interception in question falls within the parameters of Chapter 119, the warrantless surveillance must be suppressed. 18 U.S.C. § 2515.

The threshold question is whether these radio-telephone conversations constitute an “oral communication” or a “wire communication.” The answer is critical because the definition of oral communication includes the expectation of privacy language derived from Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). In order for an oral communication to be protected by the Act, the speaker must have “an expectation that such communication is not subject to interception under circumstances justifying such expectation . . . .” 18 U.S.C. § 2510(2). A “wire communication” has no such restriction in its definition. It is defined as “any communication made in whole or in part through the use of facilities for the transmission of communications by the aid of wire, cable, or other like connection between the point of origin and the point of reception . . . .” 18 U.S.C. § 2510(1).

Obviously, there is a reason for the more restrictive definition of oral communications. When a person talks by telephone, he can reasonably assume privacy. That assumption may often be invalid for non-wire communications. Therefore, it is incumbent upon the participants in an oral communication to make a reasonable estimate of the privacy afforded them by their particular circumstances.

The definition of wire communication is not free from ambiguity. “[Cjommu-nication made in whole or in part through the use of facilities by the aid of wire between the point of origin and the point of reception ....’’ could be interpreted in several ways. For example, it could be argued that if any wire is used to aid the communication, it must be deemed a wire communication. If this were followed to its conclusion, the use of a radio would be included in the definition because some wires are contained in the radio transmitter and receiver — thus the communication would be aided “in part” by the use of wire. However, such an interpretation would be inconsistent with the language of the immediately succeeding section which permits an agent of the FCC, in certain circumstances, “to intercept a wire communication, or oral communication transmitted by radio . . . .” 18 U.S.C. § 2511(2) (b).

Bróadcasting communications 'into the air by radio waves is more analogous to carrying on an oral communication in a loud voice or with a megaphone than it is to the privacy afforded by a wire. As with any broadcast into the air, the invitation to listen is afforded to all those who can hear. In the instant case, the eavesdroppers merely tuned their radio receivers to the proper station. It is obvious that conversations initiated from a radio-telephone more logically fall within the category of “oral communication.”

By reading the sections together, we can only conclude that the Congress did not mean that every conversation aided in any part by any wire would be a wire communication. As a radio broadcast must be deemed an oral conversation, we believe it would strain the legislative intent to hold that conversations emanating from a radio telephone would not be treated similarly.

However, that does not end our inquiry. Although the record is not clear, it appears that some conversations were between two radio telephones while others were between a radio telephone and a regular land-line telephone. While the former are within the definition of oral communications, the use of a land-line telephone at one end of the conversation raises a serious question as to the defined category in which such a communication belongs. While logic may dictate that the same rule should apply when a conversation crosses the airways but initiates or terminates on a land line, we are not free to reach that result if the legislative intent is to the contrary.

The legislative history states:

Paragraph (1) defines “wire communication” to include all communications carried by a common carrier, in whole or in part, through our Nation’s communications network. The coverage is intended to be comprehensive.

S.Rep.No.1097, 90th Cong., 2d Sess., 1968 U.S.Code Cong, and Admin.News 2178. Based upon this indication of Congressional intent, we are forced to conclude that, when part of a communication is carried to or from a land-line telephone, the entire conversation is a wire communication and a search warrant is required.

We realize that our classification of a conversation between a mobile and a land-line telephone as a wire communication produces what appears to be an absurd result. These conversations were intercepted by an ordinary radio receiver and not by a phone tap. Logically they should be afforded no more protection than those occurring between two radio transceivers. They should be oral communications. However, Congress’s definition of a wire communication necessitates this conclusion.

This is especially ironic since Title III of the Crime Control Act contains stringent civil and criminal penalties for those who violate its provisions. In other words, any citizen who listens to a mobile telephone band does so at its own risk, and scores of mariners who listen to the ship-to-shore frequency, commonly used to call to a land-line telephone, commit criminal acts.

However we have closely examined the legislative history of Title III and have found no indication of how Congress intended to treat a radio-telephone conversation. In the absence of such an indication, we must conclude that, if the conversation involves a land-line telephone, it is a wire communication.

We have the option to use the “surely Congress did not intend” rubric and amend the statute. But usurpation of the legislative function by the courts is a basic violation of the separation of powers doctrine. We reject that alternative. Any change must therefore be made by the Congress.

The trial court should now determine whether the arrests resulted from interceptions of oral or wire communications. If from wire communications, the warrantless interception should be suppressed as to those with standing to object. If not from wire communications, the critical question then becomes whether appellants had a reasonable expectation that the communications were not subject to interception. This too is an issue of fact to be determined by the trial court at the time of the motion to suppress. The district judge made a specific finding that Hall and Nichols knew they could be heard by other people and had no right of privacy. The record substantiates this finding and it is not clearly erroneous. United States v. Gunn, 428 F.2d 1057, 1060 (5th Cir. 1970) ; 3 C. Wright, Federal Practice and Procedure § 675, at 130 (1969). The judge stated he could not, from the evidence, make such a finding as to Dever.

Therefore, as to any conversations not involving a land-line telephone by Hall and Nichols, the interceptions were not “oral communications” as defined because they lacked the requisite expectation of privacy. Thus, no search warrant was required by the statute. As to Dever, the result may be different.

III. The Fourth Amendment.

But interceptions not within the statutory definition of oral or wire communications still must meet the test of the Fourth Amendment. Electronic surveillance has come under close scrutiny by the courts and properly so. The ingenious mind of man can conjure up subtle methods of search through modern electronics as reprehensible as kicking down a door. While the Fourth Amendment offers protection from searches when unreasonable, it shuns absurd results. Every electronic surveillance is not constitutionally proscribed and whether the interception is to be suppressed must turn upon the facts of each case.

It would be absurd to hold that one is constitutionally protected from any untoward results when he makes statements at a time when he has reason to know some third party is, or probably is, listening. We have, therefore, held that “for suppression of overheard speech the speaker must have ‘justifiably relied’ on his privacy.” United States v. Fisch, 474 F.2d 1071, 1076 (9th Cir. 1973) (footnote omitted) ; see Katz, supra, 389 U.S. at 351-353, 88 S.Ct. at 511-512. In interpreting the justifiable reliance language of Katz, we have leaned heavily on Mr. Justice Harlan’s analysis:

As the concurring opinion of Mr. Justice Harlan makes clear, the concept of justifiable reliance involves both subjective and objective aspects. There must, first of all, have been a reliance on, an actual and reasonable expectation of, privacy. But beyond the individual’s expectations, the needs of society are involved. The individual's subjective, self-centered expectation of privacy is not enough. We live in an organized society and the individual’s expectation of privacy must be justifiable, “one that society is prepared to recognize as ‘reasonable.’ ”

Fisch, supra, 474 F.2d at 1076-1077 (footnote omitted).

Whether there was justifiable reliance is a factual question to be determined by the trial court. We discern no difference in substance between the test under the Fourth Amendment and that involved in the definition of oral communications under 18 U.S.C. § 2510(2). Thus, if a speaker has a justifiable expectation that his conversation is subject to interception and therefore it is not an “oral communication,” then the speaker has not justifiably relied on his privacy and the Fourth Amendment is no impediment to interception.

IV. Conclusion.

The record is unclear as to whether the critical conversations were oral or wire communications. The case must be remanded for findings on this issue consistent with our opinion. Furthermore after the district court determines that question, if it finds that the communications were oral, then it must decide if the parties had a reasonable expectation of privacy. It has already determined that Hall and Nichols did not. Finally after these conclusions, the court must insure that the objecting party has standing to complain of the interception. See Jones v. United States, 362 U.S. 257, 261, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960). If the intercepted communications were oral, and if either Hall or Nichols were parties, then they cannot complain because they did not expect privacy. In addition, a party may not protest if he was not a participant in a specific conversation.

Reversed and remanded.

FERGUSON, District Judge

(dissenting in part):

I respectfully dissent from Part I of the court’s decision. In my view, 47 U. S.C. § 605 requires a reversal of the convictions.

Se'ction 605 provides in pertinent part:

“Except as authorized by chapter 119, Title 18, no person receiving any interstate communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof, except ... [in certain situations not here applicable]. No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. ft

It is clear that prior to the 1968 amendment, the word “person” in § 605 encompassed law enforcement officials. Lee v. Florida, 392 U.S. 378, 88 S.Ct. 2096, 20 L.Ed.2d 1166 (1968); Nardone v. United States, 302 U.S. 379, 58 S.Ct. 275, 82 L.Ed. 314 (1937). In Lee, the Supreme Court squarely faced the issue:

“In [Nardone], the Court was first called upon to decide whéther § 605 had indeed served to render evidence of intercepted communications inadmissible in a federal trial. In that case the Government urged that ‘a construction be given the section which would exclude federal agents since it is improbable Congress intended to hamper and impede the activities of the government in the detection and punishment of crime.’ 302 U.S., at 383 [58 S.Ct. at 277]. In reversing the judgment of conviction, the Court’s answer to that argument was unequivocal:
‘[T]he plain words of § 605 forbid anyone, unless authorized by the sender, to intercept a telephone message, and direct in equally clear language that “no person” shall divulge or publish the message or its substance to “any person.” To recite the contents of the message in testimony before a court is to divulge the message. The conclusion that the act forbids such testimony seems to us unshaken by the government’s arguments.
******
‘Congress may have thought it less important that some offenders should go unwhipped of justice than that officers should resort to methods deemed inconsistent with ethical standards and destructive of personal liberty. The same considerations may well have moved the Congress to adopt § 605 as evoked the guaranty against practices and procedures violative of privacy, embodied in the Fourth and Fifth Amendments of the Constitution.’ 302 U.S., at 382, 383 [58 S.Ct. at 276].” 392 U.S. at 382-383, 88 S.Ct. at 2099-2100.

Section 605 as amended in 1968 likewise provides that “no person” shall divulge any communication covered by the statute to “any person.” The statutory language is clear and unambiguous. Nowhere in the statute is the word “person” restricted, limited, or modified. If the words of the statute are interpreted according to their plain meaning, § 605 clearly applies to law enforcement officers.

The majority fastens on two sentences in the Senate report to the Omnibus Crime Control and Safe Streets Act of 1968 to support its conclusion that § 605 as amended does not apply to law enforcement officials:

“ ‘Person’ does not include a law enforcement officer acting in the normal course of his duties. But see United States v. Sugden (226 F.2d 281 (9th Cir. 1955), affirmed per curiam, 76 S.Ct. 709, 351 U.S. 916 [100 L.Ed. 1449] (1956)).” S.Rep.No.1097, 90th Cong., 2d Sess., 1968 U.S.Code Cong. & Admin.News, pp. 2112, 2197.

The reference to the Sugden case was clearly intended to emphasize the word “normal” in the preceding sentence. In Sugden, short wave radio transmissions on a private farm were monitored by a Federal Communications Commission employee and were then used to prosecute the broadcasters for immigration law violations. This court, by Judge Chambers, noted that the “theory of conduct” of the immigration officers “seems to have been, ‘The Federal Communications Commission can legally listen. So we shall use their ears for what we, the Immigration Service, cannot do.’ ” 226 F.2d at 285. The court held that the intercepted conversations were inadmissible as long as the radio station was legally on the air and the operators were legally authorized to operate it.

The majority’s conclusion in Part I that § 605 does not compel a reversal of the convictions in these cases turns on the statement in the Senate report that “ ‘Person’ does not include a law enforcement officer acting in the normal course of his duties.” I would hold that where, as here, the statutory language is clear and unambiguous, and where Congress could easily have incorporated any intended restriction or limitation on the meaning of any word in the statute itself, the words of the statute must be interpreted according to their plain meaning, and the statutory language must control.

It is a well-established principle of law that “there is no need to refer to the legislative history where the statutory language is clear.” Ex parte Collett, 337 U.S. 55, 61, 69 S.Ct. 944-947, 93 L. Ed. 1207 (1949). In Easson v. Commissioner of Internal Revenue, 294 F.2d 653, 656 (9th Cir. 1961), this court held that “[w]hen a statute is unambiguous, the courts may not look elsewhere for the legislative intent.” In United States v. Oregon, 366 U.S. 643, 648, 81 S.Ct. 1278, 1281, 6 L.Ed.2d 575 (1961), the Supreme Court stated, “Having concluded that the provisions of § 1 [of the statute in question] are clear' and unequivocal on their face, we find no need to resort to the legislative history of the Act.” (Footnote omitted.) This principle of statutory interpretation has been applied in many cases. See Ex parte Collett, supra, 337 U.S. at 58; 69 S.Ct. 944; Arkansas Valley Industries, Inc. v. Freeman, 415 F.2d 713, 717 (8th Cir. 1969); Sea-Land Service, Inc. v. Federal Maritime Commission, 404 F.2d 824, 828 (D.C. Cir. 1968); Department Employees’ Local 1265 v. Brown, 284 F.2d 619, 627 (9th Cir.), cert. denied, 366 U. S. 934, 81 S.Ct. 1659, 6 L.Ed.2d 846 (1961).

The principle that clear and unambiguous statutory language must prevail over a conflicting statement in the legislative history holds' true particularly where, as here, the same language was contained and authoritatively construed in an earlier version of the statute. If Congress had intended to restrict or limit the meaning of the word “person” in the 1968 amendment, it could easily have done so in the statute itself. Indeed, Congress did explicitly distinguish between “person” and “law enforcement officer” in another section of the Omnibus Crime Control and Safe Streets Act. 18 U.S.C. § 2510, enacted (with 47 U.S. C. § 605) in Title III of the Act, contains separate definitions for “person” and for “Investigative and law enforcement officer.” These definitions apply to the provisions of chapter 119 of Title 18, 18 U.S.C. §§ 2510-20. If Congress had intended law enforcement officers to be excluded from the word “person” in § 605, it manifestly would have done so through clear statutory language, as it did in 18 U.S.C. § 2510.

The majority also seeks support for its conclusion in Part I in the statement in the Senate report that the amended section “is not intended merely to be a reenactment of section 605. The new provision is intended as a substitute.” 1968 U.S.Code Cong. & Admin.News, at p. 2196. In my view, this statement was intended to emphasize that the scope of coverage of § 605 was narrowed by the 1968 amendment, and that part of the area formerly regulated by § 605 was now to be regulated by chapter 119 of Title 18, 18 U.S.C. §§ 2510-20. Whereas formerly the provisions of § 605 applied to both wire and radio communications, the amendment restricted the scope of all provisions after the first sentence to radio communications. The amendment inserted the word “radio” before “communication” in the second and fourth sentences, deleted the phrase “wire or” preceding “radio” in the third sentence, and added the introductory clause “Except as authorized by chapter 119, Title 18,” 47 U.S.C. § 605. In these respects, the amended section was a “substitute” for, and not merely a “reenactment of,” § 605.

One court has held that § 605 as amended renders evidence of telephonic communications intercepted by police officers inadmissible. In People v. Trief, 65 Misc.2d 272, 317 N.Y.S.2d 525 (1970), aff’d mem., 37 A.D.2d 553, 323 N.Y.S.2d 659 (1971), the prosecution sought to introduce evidence obtained from telephone conversations intercepted by police officers. The prosecution conceded that prior to the 1968 amendment, the intercepted conversations would have been inadmissible, but contended that the amendment rendered them admissible. The court squarely rejected this view, holding that under § 605 as amended, the intercepted conversations must be suppressed. Cf. Commonwealth v. Coviello, Mass., 291 N.E.2d 416 (1973).

The government concedes that the convictions of the defendants were possible only because of the intercepted communications. I would hold that the divulgence of those communications to the officers of the Arizona Department of Public Safety and their divulgence by the officers at trial violated 47 U.S.C. § 605, and I would reverse the convictions.

      . Act of June 19, 1968, Pub.L.No. 90-351, § 802, 82 Stat. 212.

      . The use of electronic devices to overhear a conversation is a search under the Fourth Amendment. Berger v. New York, 388 U.S. 41, 51, 87 S.Ct. 1873, 18 L.Ed.2d 1040 (1967).

      . Act of June 19, 1968, Pub.L. No. 90-351, § 803, 82 Stat. 223. The amendment added the words “Except as authorized by chapter 119, title 18,” to the beginning of § 605. Chapter 119 governs the procedure by which law enforcement personnel may secure a warrant for electronic surveillance. The government argues that this amends the section in two ways. First, that it incorporates a requirement of expectation of privacy and second, that it changes the protection of the section from the means of conversation to the conversation itself. See Goldman v. United States, 316 U.S. 129, 133, 62 S.Ct. 993, 86 L. Ed. 1322 (1942) ; Sugden, supra, 226 F.2d at 284. We need not reach these questions because we hold § 605 does not apply to the facts of this case.

      . We note that § 605 forbids divulgence of restricted communications to “any person.” As a law enforcement officer is not a “person” under § 605, it is questionable whether the communications by the housewife to the DPS would be in violation of this section.

      . It would also be inconsistent with the mutually exclusive definitions of “wire” and “radio” communications found in the Communications Act of 1934. 47 U.S.C. § 153(a) & (b).

      . See 18 U.S.C. §§ 2511, 2520.

      . See, e.g., S.Rep.No.1097, 90th Cong., 2d Sess., 1968 U.S.Code Cong, and Admin.News 2112; Hearings on Controlling Crime through More Effective Law Enforcement Before the Subcomm. on Criminal Laws and Procedure of the Senate Comm, on the Judiciary, 90th Cong., 1st Sess. (1967) ; Hearings on the Right of Privacy Act of 1967 Before the Subcomm. on Administrative Practice and Procedure of the Senate Comm, on the Judiciary, 90th Cong., 1st Sess. (1967) ; Hearings on Criminal Laws and Procedure Before the Subcomm. on Criminal Laws and Procedure of the Senate Comm, on the Judiciary, 89th Cong., 2d Sess. (1966).
      G. Robert Blakey, now a staff member of the Senate Criminal Laws and Procedure Subcommittee, is the acknowledged author of Title III and other related works on eavesdropping. Schwartz, The Legitimation of Electronic Eavesdropping: The Polities of Law and Order, 67 Mich.L.Rev. 454, 456-57 & n. 10 (1969). We also have studied his writings and have found no solution. See, e.g., American Bar Association Project on Minimum Standards for Criminal Justice: Standards Relating to Electronic Surveillance (Approved Draft 1971) ; President’s Commission on Law Enforcement and the Administration of Justice, Task Force Report : Organized Crime 80, 91-113 (1967) ; Blakey & Hancock, A Proposed Electronic Surveillance Control Act, 43 Notre Dame Law. 657 (1968).

      . While People v. Trief involved interceptions of wire rather than oral eommunications, its interpretation of § 605 to prohibit the divulgence of conversations intercepted by police officers does not depend upon the distinction between oral and wire communications. If § 605 applies to law enforcement officials, it covers interceptions of oral as well as wire communications.

      . It is clear that no expectation-of-privacy requirement is contained in § 605. United States v. Sugden, supra, 226 F.2d at 284-285; United States v. Laughlin, 226 F.Supp. 112 (D.D.C.1964) ; United States v. Fuller, 202 F.Supp. 356 (N.D.Cal.1962).


source: Caselaw Access Project

author: GEWIN, Circuit Judge:

license: Public Domain

text:
    FRANK COULSON, INC.—BUICK, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee.
    No. 71-3635.
    United States Court of Appeals, Fifth Circuit.
    Jan. 17, 1974.

      F. Kendall Slinkman, West Palm Beach, Fla., for plaintiff-appellant.
    L. Martin Flanagan, John R. Beranek, Thomas W. Watkins, West Palm Beach, Fla., for defendant-appellee.
    Before GEWIN, COLEMAN and AINSWORTH, Circuit Judges.
   GEWIN, Circuit Judge:

The mutually profitable relationship between an automobile manufacturer and its dealer sometimes ends in an unpleasant separation. In this particular instance, like numerous other disputatious counterparts, litigation ensued. Frank Coulson, Inc. — Buick (Coulson), formerly a Buick dealer in Florida, brought suit in the Florida state courts against the General Motors Corporation (GM). Coulson asserted two independent grounds for relief: (1) Through duress and undue influence wrongfully exerted by GM, Coulson was forced to sell its dealership assets; and (2) GM had maliciously interfered with the contractual negotiations between Coulson and the dealership purchaser. General Motors removed the case to federal district court because of diversity of citizenship. On the basis of special interrogatories, a jury found against Coulson on its first theory — forced sale. It awarded damages of $25,000, however, on the second theory — interference with contractual negotiations. The trial judge set aside the jury verdict by granting GM’s motion for judgment notwithstanding the verdict and Coulson appeals. We vacate and remand with directions.

Coulson had been at least a moderately successful dealership enjoying steadily increasing sales. In 1970 GM received two letters highly critical of the dealership. The letters allegedly had a substantial influence on Buick executives and shortly after their receipt Coulson received a series of visits from GM representatives. Frank Coulson, corporation president, claimed that the visits were part of a plan by GM to force a sale of the dealership assets.

GM representatives apparently suggested that Frank Coulson, age 65, was getting old and should bring a younger man into the business. Coulson agreed to negotiate the sale of his dealership assets, and authorized GM to solicit buyers. In the course of finding buyers GM apparently “spread the word” that Coulson was going out of business. Coulson testified that dissemination of this information caused a decline in sales. He maintained that GM also coerced his sale by demands for unnecessary repairs on his facilities. Furthermore, Gene Miller, the Zone Manager for GM, allegedly intimated that the Coulson franchise would not be renewed. Nevertheless, the franchise was renewed in November 1970, one month before the eventual sale.

Coulson did enter into negotiations for the sale of the dealership assets with Glenn Ralph, a Buiek dealer from New York. Frank Coulson testified that in April 1970 he and Ralph agreed on a sales price of $100,000. Gene Miller, however, notified Ralph and Coulson that as GM’s Zone Manager he would not approve a sale for any amount in excess of $50,000. GM’s approval was essential because without it a purchaser would not receive the necessary Buick franchise.

Coulson testified that $50,000 was the value of the corporation’s tangible assets alone — $25,000 in parts and $25,000 in equipment. Thus, a sale at that price would allow nothing for intangible goodwill. Expert testimony was presented by Coulson that the dealership’s goodwill might be worth as much as $400,000. Even GM’s expert admitted that Coulson’s good-will was worth between $35,000 and $50,000. Moreover, GM recognized that Coulson’s parts were worth $25,000. Although GM contends that the dealership’s furniture, fixtures and equipment had been depreciated to zero, Mr. Miller seemed to recognize the value of $25,000. On cross examination Miller testified that the way he “looked at it” all Coulson had to sell were tangible assets.

Coulson and Ralph eventually consummated a sales transaction. In the written documents the sales price was stated to be $50,000. Additionally, Mr. and Mrs. Coulson entered into a $35,000 transaction with Kengle Realty, a New York corporation owned by Glenn Ralph and his brother. This transaction, in a rather complex manner, related to real estate improvements upon the premises in which the Coulson dealership was located. Ralph testified that the two transactions were actually part of the sale, and thus the actual price of the dealership was $85,000. According to Ralph, the second agreement, which related to the real estate, was designed to keep the true price concealed from GM. In response to a special interrogatory the jury found that the $35,000 transaction was indeed separate from the sale of the dealership assets.

The district court submitted each of Coulson’s grounds for recovery to the jury. The first theory of recovery, that GM had coerced Coulson in bad faith into a sale, was contained in the following interrogatory:

Do you find from a preponderance of the evidence that the defendant, General Motors, was guilty of bad faith in its dealing with plaintiff ?

The jury responded in the negative. Coulson’s second ground, that GM-maliciously interfered with its negotiations once they were under way, was embodied in another interrogatory:

Do you find from a preponderance of the evidence that the defendant, General Motors, is guilty of malicious interference with the plaintiff’s contract negotiations with Ralph ?

The jury answered “Yes.” The jury, therefore, found that although GM did not coerce Coulson to sell, it had interfered with negotiations for the sale.

The district court granted GM’s motion for judgment notwithstanding the verdict assigning three reasons as a basis for its decision: (1) the jury’s finding of no bad faith indicated that there was no substantial evidence of malicious interference; (2) GM was privileged to intervene and there was no substantial evidence that it overreached this privilege; (3) the evidence was clear and overwhelming that Coulson had suffered no damage from GM’s alleged interference in the contract negotiations. GM has properly urged us to judge the correctness of the result reached by the trial court, not the reasons relied upon. Since we view the result as error, however, we must necessarily explain our differences with the lower court.

The district court’s first assigned reason was based upon the inconsistency of a finding of no “bad faith” with a finding of “maliciousness.” We admit that in common usage “bad faith” may be an element of “maliciousness.” As we understand Florida law, however, a strict legalistic concept of maliciousness is not an element of an action based on interference with a prospective contractual relationship. In Florida, malice will be inferred where the interference is shown to be intentional. Furthermore, we are convinced that the jury was entirely justified in treating the bad faith interrogatory as applicable to Coulson’s first theory — forced sale. Coulson’s second theory was contained in the malicious interference interrogatory. We find that the jury’s answers are consistent with its award to Coulson Corporation.

Next, we shall consider the trial court’s finding that Coulson suffered no damage from any alleged interference by GM. This conclusion by the trial court is based upon the determination that the sales price was $85,000, not $50,000. This deduction, of course, amounts to a rejection of the jury’s answer to special interrogatory No. I. The proper test for deciding a motion for judgment notwithstanding the verdict was established by this circuit in Boeing v. Shipman:

“[T]he court should consider all of the evidence ... in the light and with all reasonable inferences most favorable to the party opposed to the motion. . . . [I]f there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motion should be denied, . . . [I]t is the function of the jury as the traditional finder of facts, and not the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses.”

Viewed in this light the jury’s finding should stand if there is substantial evidence to support it.

The jury heard Frank Coulson testify that the $35,000 was not part of the price of the dealership assets. His credibility could have been assessed by the jury as greater than that of Glenn Ralph. The jury knew that Coulson’s testimony was corrobrated by the written contract. It was known that Glenn Ralph’s financial interest in Kengle Realty, the party to the $35,000 note, was not identical to his financial interest in Glenn Ralph Buick, Inc. A careful analysis of the record clearly indicates to us that the testimony of Coulson as to value was supported in some respects by testimony introduced by GM. Miller testified for GM that the tangible assets were worth $50,000 and he would allow no value for intangible assets. Everett Nowlen, the Certified Public Accountant, used as an expert witness by GM, testified that the intangible assets could be worth as much as $50,000. Glenn Ralph readily admitted that the business had a distinct value as a going concern. We believe this amounts to substantial evidence to support the jury’s conclusion.

Of course, we concede that substantial evidence existed to support GM’s version of the $35,000 transaction. Even if the jury was in error on this issue, however, it does not follow that Coulson was not damaged by the alleged interference of GM. Coulson has asserted that GM’s entire course of interference reduced its sales price from what it otherwise would have been. The jury agreed.

The trial court’s final reason for granting the judgment notwithstanding the verdict was the lack of substantial evidence that GM overreached its privilege to intervene. The scope of the privilege to intervene in contractual negotiations is not clearly defined under Florida law. We find no reason to presume, however, that Florida is not in accord with the weight of authority. It is generally recognized that tort liability exists for interference with a prospective contractual relationship. The cause of action has run parallel to that for interference with existing contracts. As is the ease with existing contracts any manner of intentional invasion of the plaintiff’s interests may be sufficient if the purpose is not a privileged one. When the plaintiff proves a prima facie case of interference, the defendant has the burden of avoiding liability by showing that his conduct is privileged or justified

This branch of the law, unlike others, has not crystallized a complete set of definite rules as to the existence or non-existence of a privilege. Various important factors have been identified, however, which relate to an appraisal of the private interests of the parties involved as well as to a consideration of the social utility of these private interests The principal issue thus becomes whether the social benefits derived in permitting acts of intervention outweigh the harm to be expected therefrom. Therefore, if Coulson established a prima facie case of interference, GM had the burden of justifying its activity based upon social policy.

On the basis of all the evidence presented, the jury certainly could have believed that GM’s zone manager, Miller, stated to Frank Coulson and Glenn Ralph that he would not approve a sale for a price exceeding $50,000. Furthermore, the jury could have concluded that such statements disrupted contractual negotiations and reduced Coulson’s sale price. Proof of intentional interference and resulting damage are sufficient to establish Coulson’s prima facie case.

GM has a strong private interest in the success of its dealerships. This interest will justify intervention for proper business purposes. GM is privileged to approve or disapprove a purchaser, for example, because it can demonstrate strong and legitimate business interests to justify such action. It will deal with the purchaser in the future and he will represent Buick to the public. The purchaser’s integrity is justifiably important.

GM’s privilege to intervene as to the dealer’s sale price is similarly limited to justifiable business interests. It has been recognized that manufacturers, like GM, have an interest in ensuring that new dealers are financially sound. Such an interest does not grant GM an absolute privilege, however, to limit a dealer’s sales price. An expansive construction would give GM the privilege to impose undue economic pressure on its outgoing dealer, in whose business its interest is terminated, and to unduly benefit the incoming dealer’s financial strength by exercising a powerful veto and refusing to approve a proposed sale of the dealership except at a grossly inadequate price. In the instant the case the limitation imposed by GM’s zone manager was $50,000, the value of the tangible assets. As stated earlier, GM’s own expert accountant testified that Coulson’s good will was worth between $35,000 and $50,000. Coulson’s witness would have placed it much higher. Furthermore, GM’s zone manager had no knowledge of Ralph Buick’s financial condition when the $50,000 limit was set. It is apparent that the $50,000 limitation bore no reasonable relation to the future financial solvency of Glenn Ralph Buick, Inc.

After giving due consideration to all of the evidence disclosed in the record, we hold that there was indeed substantial evidence to support the findings of the jury. Accordingly, the jury’s verdict in favor of Coulson Corporation must be reinstated. The judgment of the district court is vacated and the case is remanded for proceedings consistent with this opinion.

Vacated and remanded with directions.

      . On April 16, 1973, a panel of this court entered a decision in this case. By order of April 25, 1973, the court vacated that opinion.

      . This action was originally brought in the name of Frank Coulson, as an individual, but upon stipulation of counsel the complaint was amended to substitute Frank Coulson, Inc.— Buick as plaintiff. Frank Coulson is the president of the Coulson corporation.

      . Both theories for recovery were based on the common law, and Coulson did not rely on the Dealer’s Day in Court Act, 15 U.S.C. § 1221 et seq. (1970).

      . The jury answered special interrogatory No. 1:
      Do you find from a preponderance of the evidence that the $35,000.00 promissory note which was executed and delivered by Kengle Realty, Inc. to Mr. and Mrs. Coul-son was part of the purchase price which Ralph paid to the Coulson corporation for the purchase of the dealership business? Answer “yes” or “no”
      ANSWER “No”

      . See Dade Enterprises v. Wometco Theatres, 160 So. 209, 210 (Fla.1935); Symon v. J. Rolfe Davis, Inc., 245 So.2d 278, 280 (Fla.App.1971), cert. denied, 240 So.2d 36 (Fla.Sup.Ct.1971). This is in accord with the general rule that actual malice need not be demonstrated. An intentional invasion of plaintiff’s interests in any substantial manner may be sufficient to support a recovery if such an invasion is not a privileged one. W. Prosser, Handbook of the Law of Torts, § 129, at 927, 928, 942 and § 130 at 952 (4th Ed. 1971).

      . The term “bad faith” was fully explained to the jury in the instructions. It was explicitly pointed out that “bad faith” meant coercion, duress or intimidation. These are terms used by Coulson to describe its first theory. GM recognizes that the jury finding of no bad faith was in respect to Ooulson’s decision to sell.

      . See note 4, supra.

      . 411 F.2d 365, 374 (5th Cir. 1969).

      . Florida decisions on inducing breach of contract are summarized in Brunswick Corporation v. Vineberg, 370 F.2d 605, 609 (5th Cir. 1967).

      . W. Prosser, Handbook of the Law of Torts § 130 at 949, 952 (4th Ed. 1971).

      . Id. The scope of privileged conduct is narrower in the ease of an existing contract, however. Id. at 954.

      . Id. at 942, 953; 45 Am.Jur.2d Interference, § 56 at 330 (1969).

      . Restatement of Torts § 767 (Comment a.) (1957).

      . Id.

      . Annot., 16 A.L.R.3d 1191, 1221 (1967).

      . Cf. Zoby v. American Fidelity Co., 242 F. 2d 76, 80 (4th Cir. 1957).

      . Pierce Ford Sales, Inc. v. Ford Motor Co., 299 F.2d 425, 429 (2d Cir. 1962).


author: MANSFIELD, Circuit Judge:

text:
    CORENCO CORPORATION, Plaintiff-Appellant, v. SCHIAVONE & SONS, INC., et al., Defendants-Appellees, and Chester K. Twiss et al., Additional Defendants to Counterclaim.
    Nos. 331, 521, Dockets 73-2216, 73-2286.
    United States Court of Appeals, Second Circuit.
    Argued Sept. 26, 1973.
    Decided Oct. 26, 1973.

      Jerome Doyle, New York City (Leonard A. Spivak, George Wailand, Cahill, Gordon & Reindel, New York City, Richard L. Brickley, Brickley, Sears & Cole, Boston, Mass., of counsel), for plaintiff-appellant and additional defendants to Counterclaim.
    Robert W. Sweet, New York City (Blaine V. Fogg, Thomas J. Schwarz, Edward J. Yodowitz, Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel), for defendants-appellees.
    William E. McCurdy, Jr., New York City (Lord, Day & Lord, New York City, of counsel), for defendant-appellee Reed Rubin.
    Before MOORE, MANSFIELD and OAKES, Circuit Judges.
   MANSFIELD, Circuit Judge:

A familiar defensive tactic increasingly used by target companies to delay or thwart a take-over bid made by a tender offeror has been the institution of a lawsuit against the offeror charging violation of the federal antitrust laws or non-disclosure of material information in violation of the Williams Act, Pub.L. 90-439, 82 Stat. 454, 15 U.S.C. §§ 78m(d), (e), 78n(d)-(f). These actions have presented us with difficult and unusual questions. See, e. g., Gulf & Western Industries, Inc. v. Great Atlantic & Pacific Tea Co., 476 F.2d 687 (2d Cir. 1973); Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247 (2d Cir.1973); SEC v. Bangor Punta Corp., 480 F.2d 341 (2d Cir. 1973). See generally E. Aranow & H. Einhorn, Tender Offers for Corporate Control (1973). The present case is no exception. It is novel in two respects. First, the district court, facing a question of first impression, held that the tender offeror, in this case a closely held company, should disclose financial data as to its own past operations, since this information might aid those solicited in deciding whether to tender or withhold their shares. Secondly, the principal appeal is not by the offeror, which has decided to abide by this aspect of the district court’s decision, but by the target company, Corenco Corp., after it has successfully obtained a permanent injunction based on the offeror’s failure to disclose its financial operations. Coren-co appeals from a modification of that judgment which would permit the offeror to cure the deficiency by making the required disclosure to the offerees and giving them a right of withdrawal.

The original judgment entered on August 9, 1973, 362 F.Supp. 939, in favor of Corenco, the target company, after a trial before Judge Ward in the Southern District of New York, permanently enjoined Schiavone & Sons, Inc. (“Schia-vone”), its parent company, Michael Schiavone & Sons, Inc. (“Michael Schia-vone”), and Bear Stearns & Co., and all persons acting on their behalf (herein collectively referred to as “the Schiavone defendants”) from (a) soliciting the tender of any shares of stock of Coren-co, (b) acquiring any Corenco shares as a result of the tender offer, (c) further soliciting the proxies of holders of Cor-enco common stock, (d) voting any shares of Corenco common stock or proxies, (e) otherwise utilizing any such stock or shares of Corenco as a means of gaining control of Corenco “unless and until the Schiavone defendants make full disclosure of financial information about Schiavone and Michael Schiavone.” The modification relieved the Schiavone defendants from the injunctive provisions of the order and judgment and permitted them to continue soliciting the tender of Corenco shares upon their filing with the Securities Exchange Commission (the “SEC”) an amendment (containing financial statements for Schia-vone and Michael Schiavone) to Schia-vone’s Schedule 13D statement and upon their distribution of an “Extended and Amended Offer to Purchase.”

Corenco argues that the modification permitting the tender offer to proceed upon the filing of a curative amendment will encourage minimal disclosure by other tender offerors in the future and that it was based on the district court’s mistaken belief that the Schiavone defendants intended to disclose as much financial information as they had furnished to the First Pennsylvania Banking & Trust Co. (“First Pennsylvania”) in securing a loan to finance the tender offer.

Both Corenco and the Schiavone defendants also appeal from those portions of the district court’s judgment of August 9, 1973, which dismissed certain of their various other claims and counterclaims. Corenco alleges several other violations (besides the failure to disclose financial information about Schiavone and Michael Schiavone) of §§ 14(d) and 14(e) of the Securities Exchange Act of 1934 (“the Exchange Act”), 15 U.S.C. §§ 78n(d) and 78n(e), and claims that prior to the public tender offer the Schiavone defendants together with Reed Rubin, a broker, conspired in violation of § 13(d) of the Exchange Act, 15 U.S.C. § 78m(d), to acquire or hold together more than 5% of Corenco’s stock without making the required filings. The Schiavone defendants counterclaim that the Corenco management itself violated § 13(d) of the Exchange Act by failing to file a Schedule 13D statement while acting in concert to defeat Schiavone’s offer.

For reasons hereinafter stated we hold that the district court acted well within its discretion in modifying its previous order and in permitting the tender offer to proceed upon the filing of a curative amendment. However, because we believe that the district court may have believed that the Schiavone defendants intended to disclose all of the financial information about themselves that they had previously furnished to First Pennsylvania, we remand for a determination by the district court as to whether the disclosure of Schiavone financial information as to earlier years should be required. In all other respects we affirm the modified judgment of the district court.

Although Corenco has challenged at length some of Judge Ward’s findings of fact as contrary to the weight of the evidence, we are here governed by the “clearly erroneous” standard. Rule 52(a), F.R.Civ.P.; United States v. National Association of Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007 (1950). Under that standard the essential facts appear to be as follows. From time to time during and prior to 1972 Corenco, a publicly held corporation organized under Maine laws and engaged in production of tallow, fertilizers, shortening and industrial oils, offered a “finders fee” to Reed Rubin, a broker employed by Singer & Mackie, Inc., payable upon his finding any company successfully acquired by Corenco. In October, 1972, Rubin arranged a meeting between Corenco representatives and Joel Schiavone, vice-president of Michael Schiavone and president of Schiavone for the purpose of exploring preliminarily a possible acquisition of Schiavone by Corenco. Both Michael Schiavone and its subsidiary, Schiavone, are closely held corporations engaged in the scrap metals business. Although the companies and their industries were discussed generally at this meeting, no concrete proposal or plan emerged for a merger with or an acquisition by Corenco of the Schiavone companies. Thereafter discussions periodically took place between some or all of the representatives of both sides until on April 12, 1973, negotiations were terminated.

In the meantime, in January, 1973, Michael Schiavone began purchasing Corenco stock, initially for investment, using Rubin as its broker. These purchases continued throughout the first half of 1973 so that by July 3 Michael Sehiavone held 18,300 shares or 4.8% of the 383,456 Corenco shares outstanding. Prior to March 12, 1973, Rubin himself had also purchased shares of Corenco stock, which were held in various accounts toward which he occupied a special relationship: as trustee of a trust established by Vera Rubin (12,965 shares), as investment “advisor” to his father, Samuel Rubin (4,950 shares), and as director and treasurer of the Research Institute for the Study of Man (1,000 shares). In the aggregate these acquisitions by Rubin totalled 4.996% of Corenco’s outstanding shares. Prior to July 17, 1973 (the date when Schiavone made its tender offer) Rubin neither advised the Sehiavone companies of these acquisitions nor did he know of Michael Schiavone’s purchases of Corenco stock for purposes other than investment. Rubin, of course, was to be remunerated as a finder only if Corenco acquired Sehiavone, not if Sehiavone acquired Corenco.

On July 17, 1973, Sehiavone announced publicly that it was offering to purchase shares of Corenco stock with the intent of gaining control of the corporation. Immediately before the announcement Sehiavone filed with the SEC a statement on Schedule 13D as required by § 14(d) of the Exchange Act and an Offer to Purchase dated July 17, 1973. Sehiavone offered to pay $33 net per share for Corenco shares tendered prior to August 2, 1973, except that Sehiavone would not be obligated to purchase fewer than 90,000 nor more than 130,000 Corenco shares. The Offer to Purchase also disclosed: that Michael Sehiavone had already acquired approximately 4.8% of Corenco’s common stock “for investment;” that Sehiavone and Michael Sehiavone would own approximately 28.6% of the outstanding Cor-enco shares if 90,000 shares were purchased and approximately 39.2% of the outstanding shares if 130,000 shares were purchased and that Schiavone’s purpose in making the offer was to gain control of Corenco with a view to a possible merger or other combination of the two companies. The Offer also included financial information about Corenco and the market value of its stock, and information about the officers and directors of the Sehiavone companies and the source of the funds required to finance the tender offer. However, the Offer did not contain any financial information as to Sehiavone or Michael Schia-vone.

On the next day, July 18, Sehiavone published an announcement of its offer in the Wall Street Journal. The announcement stated that it did not itself constitute an offer and advised readers that they could obtain copies of the printed Offer to Purchase from the Depository, the Forwarding Agent or the Dealer Manager. The announcement also explained that no tenders would be accepted unless made by a “duly executed” Letter of Tender which the shareholder could obtain only if he requested an Offer to Purchase.

Within a day or two after the announcement of the tender offer Coren-eo’s management decided — by unanimous vote — to fight it. A series of letters were sent by the management to shareholders urging them to delay action on the offer and warning them that the offer was “inadequate.” The letters were supplemented by press releases and hundreds of telephone calls. On July 23 the management declared an extra cash dividend payable to shareholders of record on August 3 (the day after Schiavone’s offer was due to expire) and a 10% stock dividend payable to shareholders of record on August 21. In short Cor-enco made it clear that it would leave no stone unturned in its opposition to the bid.

On July 25 Corenco’s management brought the present suit in the United States District Court for the Southern District of New York seeking an injunction against the tender offer. The complaint alleged that the proposed acquisition would violate § 7 of the Clayton Act, 15 U.S.C. § 18, by precluding a potential competitor from entering the market. It also claimed that the “announcement” in the Wall Street Journal itself constituted a tender offer within the meaning of § 14(d) of the Exchange Act and hence was illegal because it failed to include the required information, and that the Offer to Purchase contained several material misstatements and omissions in violation of § 14(e) of the Exchange Act. The management also claimed that the Schiavone companies and Reed Rubin had violated § 18(d) of the Exchange Act by collectively conspiring to acquire more than 5% of Cor-enco’s stock without making the required filings. The Schiavone defendants counterclaimed alleging that Coren-co’s management itself had violated § 13(d) by acting in concert to oppose Schiavone’s tender offer without filing a statement on Schedule 13D.

Both parties asked initially for preliminary injunctions against each other. At a subsequent hearing on their petitions, however, they stipulated, pursuant to Rule 65(a)(2), F.R.Civ.P., that the hearing would constitute a trial on the merits. After the hearing the district court, in a well reasoned opinion, dismissed most of Corenco’s claims, including its antitrust charges. However, it held that in view of the circumstances of the case and the nature and purpose of Schiavone’s tender offer, Schiavone should have disclosed financial information about itself and Michael Schiavone and that its failure to do so violated § 14(e) of the Williams Act. Judge Ward noted particularly that both Schiavone companies were privately held so that no financial information about them was publicly available, and reasoned that such information might be important to an investor seeking to decide whether he should sell his Corenco shares for $33 or retain them as an interest in a company that might be controlled by Schiavone if its solicitation of tenders should be successful. He further concluded that it would be material to a Corenco shareholder to have information as to the source of the funds available to repay the loan obtained by Schiavone from First Pennsylvania to finance the tender offer. Accordingly Judge Ward restrained the Schiavone defendants from acquiring any Corenco shares as a result of their tender offer “unless and until the Schiavone defendants make full disclosure of financial information about Schiavone and Michael Schiavone.” The court dismissed the Schiavone defendants' counterclaim against Corenco.

The injunction was issued on August 9, 1973. On August 10, the Schiavone defendants moved the court pursuant to Rules 60(b)(5) and (6), F.R.Civ.P., for relief from the injunction to permit them to file with the SEC an amendment — containing financial information about Schiavone and Michael Schiavone —to Schiavone’s Schedule 13D statement and to distribute an “Extended and Amended Offer to Purchase.” In an affidavit in support of this motion Schia-vone represented that the financial information contained in the proposed amendment “is the information which was submitted in confidence to the First Pennsylvania Banking and Trust Company in connection with the financing of the tender offer.” On August 16, 1973, the court granted the Schiavone’s motion on condition that the “Extended and Amended Offer to Purchase” state in bold face type that each shareholder who had already tendered his shares could withdraw them within 30 days and that the Amended Offer contained financial information about the Schiavone companies which had not previously been disclosed.

Corenco appeals from the court’s August 16th order modifying its injunction and from its judgment entered on August 9, 1973, dismissing its various oth(er complaints. The Schiavone defendants appeal from the district court’s dismissal of their counterclaim. Corenco further contends for the first time upon this appeal that since Michael Schiavone supplied First Pennsylvania with financial statements for the five-year period from February 1968-1973, whereas in its amendment Schiavone disclosed financial statements for the Schiavone companies only for the years ended February 1972 and 1973, Schiavone’s amendment was in any event inadequate.

The Permission to Make Curative Amendments

Coreneo argues that in view of Schiavone’s deliberate failure to reveal even limited financial information about itself and Michael Schiavone until a permanent injunction had been entered against it, the modified order permitting further curative amendments containing the essential financial information violates the principle underlying the Supreme Court decision in J. I. Case Co. v. Borak. 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964), that “remedies should be designed to encourage compliance with the law.” Here, Coreneo asserts, the remedy is so minimal that future tender offerors will be encouraged to make the least disclosure possible until compelled by court order. Coreneo urges, as a more appropriate remedy, that Schiavone be required, if it desires to pursue the acquisition, to start over, making a wholly new tender offer after all previously tendered shares have been returned and a “cooling off” period has expired. The purpose and effect of such a provision would be to penalize Schiavone for its non-disclosure and deter offerors generally from playing their cards too close to the vest.

If Schiavone’s conduct had represented an effort on its part, with knowledge that Coreneo shareholders were entitled to the financial information, to prevent them from obtaining it, there might be merit to Corenco’s proposal as a means of insuring future compliance with the Williams Act. B,ut we think that Coren-co attributes to Schiavone guilty knowledge and intent which it is not shown to have possessed. The district court’s order of August 9, 1973, was the first time that the new Williams Act had been construed to require a tender offer- or to disclose financial information about itself. Since Schiavone does not challenge this provision of the court’s order, it is not an issue before us. However, until the district court’s ruling the question was far from clear and a respectable argument could be made that such information was at best of peripheral significance. Ordinarily a stockholder receiving a tender offer is primarily interested in the cash price. Although he may decide not to accept an offer if he believes that the proposed takeover of control will strengthen his investment and the offeror is not exactly anxious to encourage such a course, it is clear that if all stockholders rejected the offer, there would be no such strengthening of his investment. Hence, the of-feror’s financial condition is at best a secondary factor. Once the tender of-feror’s obligation to reveal past finan-cials is established, however, it would be self-defeating for an offeror not to include the information from the outset. Failure to include such information from the outset would lead inevitably to additional loss of time and expense. Hence we cannot agree that allowance of a curative amendment here, where an obligation to disclose past financials was found for the first time, will encourage deliberate violations of the Williams Act in the future.

In permitting the Schiavones to remedy the deficiency the court was adhering to a logical method of securing compliance with the Exchange Act which we have previously endorsed. See Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247 (2d Cir. July 3, 1973) [Current] CCH Fed.Sec.L.Rep. |[ 94,041 (2d Cir. 1973). Cf. Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937 (2d Cir. 1969); Butler Aviation International, Inc. v. Comprehensive Design Inc., 425 F.2d 842, 844-845 (2d Cir. 1970). Bath Indus. Inc. v. Blot, 427 F.2d 97 (7th Cir. 1970), to which Corenco refers us, involved a late rather than an insufficient filing and the court there emphasized the broad discretion of the trial court in fashioning remedies.

We are not impressed by Corenco’s emphasis on Schiavone’s delay in disclosing its financials until it was permanently enjoined from proceeding with its tender offer. Curative amendments should not be proscribed merely because the parties agree under Rule 65, F.R. Civ.P., to merge their applications for preliminary and final relief into one trial. Such a result would obviously discourage stipulations under the Rule.

Aside from its quarrel with the wisdom of allowing a curative amendment in this case, Corenco asserts that the district court had no power under Rules 60(b)(5) and (6), F.R.Civ.P., to grant relief from its former permanent injunction because the Schiavone defendants had not shown that they were “seriously and needlessly impeded” by the injunction and that relief was necessary “to achieve the results intended.” See King-Seeley Thermos Co. v. Aladdin Industries, Inc., 418 F.2d 31 (2d Cir. 1969). The short answer to this is that the injunction, being expressly limited in duration “until the Schiavone defendants make full disclosure of financial information about Schiavone and Michael Schiavone,” reserved to the court the discretionary equitable power to modify its terms. Neither King-Seeley nor any of the cases relied on by Corenco involved injunctions expressly limited in duration. Compare United States v. Swift, 286 U.S. 106, 52 S.Ct. 460, 76 L. Ed. 999 (1932) (meatpackers enjoined from selling groceries), and United States v. United Shoe Corp., 391 U.S. 244, 88 S.Ct. 1496, 20 L.Ed.2d 562 (1968) (shoe machinery manufacturers restrained in various ways) with Humble Oil & Refining Co. v. American Oil Co., 405 F.2d 803 (8th Cir.), cert. denied, 395 U.S. 905, 89 S.Ct. 1745, 23 L. Ed.2d 218 (1969) (oil companies “perpetually” enjoined from using certain names). Even assuming that the standards set forth in King-Seeley for the court’s exercise of discretionary power are applicable here, relief from the permanent injunction was clearly permissible once the specific results intended- — • disclosure of financials by Schiavone— had been achieved.

We think that Judge Ward acted well within his discretionary power in permitting the tender offer to proceed upon the filing and distribution of a new amendment disclosing financial information about Schiavone and Michael Schiavone. We are troubled, however, by the possibility that he may have believed that Schiavone was disclosing all of the financials that it had previously furnished to First Pennsylvania instead of those for the last two out of the five years given to the bank. Since this issue was raised for the first time on appeal, we remand the ease to the district court to determine in its discretion whether the Schiavone defendants should furnish financial statements for the three earlier years. The district court may also want to review the form of the financial disclosures, which has been questioned by the staff of the SEC.

Dismissal of Other Claims Brought Under § 14(d) and (e) of the Exchange Act

Corenco argues that the district court erroneously dismissed its several other claims under § 14(d) and (e) of the Exchange Act: that Schiavone’s “announcement” of its tender offer in the Wall Street Journal on July 18 1973, itself constituted a tender offer which should have included all the information required by § 14(d); that Schia-vone’s original Offer to Purchase misrepresented that Michael Schiavone’s purpose in acquiring approximately 4.-8% of Corenco’s common stock prior to the tender offer was “for investment;” and that the original Offer to Purchase failed to disclose the likelihood or possibility that Corenco’s assets would be converted into cash for use in repayment of the loan taken by Schiavone to finance the tender offer. We find no merit in these claims and affirm the district court’s dismissal of them.

Schiavone’s “announcement” in the Wall Street Journal fell short of being a tender offer within the meaning of § 14(d) since it specifically stated that it did not itself constitute an offer and that tenders could be made only after the Corenco shareholder had obtained a printed Offer to Purchase and Letter of Tender. In another context we have recognized that an announcement of an offer may be different from an offer. See Chris-Craft Industries, Inc. v. Bangor Punta Corp., 426 F.2d 569, 574 (2d Cir. 1970); Rules 134, 135, Securities Act of 1933. In the absence of a statutory checklist of features that may be included in a tender offer announcement which does not also constitute a tender offer, courts are left to develop a “rule of reason.” Id. The purposes of the Williams Act would not have been furthered significantly in this case if Schiavone had included in its newspaper announcement all the information found in its 24-page Offer to Purchase, which was readily available and which a Corenco shareholder would as a practical matter have to obtain before he could tender his shares, since the Letter of Tender required to be submitted by each tendering shareholder could be obtained only by stockholders who also received a copy of the Offer.

Section 14(e) of the Exchange Act prohibits only material misstatements in connection with a tender offer. Even assuming that the statement in the original Offer to Purchase concerning Michael Schiavone’s purpose in acquiring Corenco stock prior to the tender offer was inaccurate, since Michael Schiavone may have acquired some shares after Schiavone decided to seek control of Corenco, Corenco does not explain how the misstatement was material. See Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-154, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972). Indeed Corenco concedes that this information regarding the purpose of pre-tender offer purchases was not required under §§ 13(d) and 14(d) of the Exchange Act. Even if the misstatement was material, Schiavone corrected it in its first amendment (filed July 30, 1973) and the district court could well have concluded that no further action was necessary.

We do not agree with Corenco’s assertions that if the tender offer is successful a conversion of its assets into cash to be used to repay bank loans made to finance the offer is “likely” or “probable.” If the offer is successful, the income and assets of both Schiavone and Michael Schiavone, which has consolidated assets in excess of $17.5 million and a net worth in excess of $6.8 million, will be available. Thus, conversion of Corenco’s assets, unlike the situation in General Host Corp. v. Triumph American, Inc., 359 F.Supp. 749 (S.D. N.Y.1973), appears most unlikely. But even if such a conversion were likely, we would only require a disclosure of the circumstances rather than a specific statement that a conversion was likely to occur. General Host Corp., supra, 359 F.Supp. at 755. This the district court has already done by requiring Schiavone to disclose financial information about itself and Michael Schiavone.

Dismissal of Corenco’s Claim Under § 13(d) of the Exchange Act

Coreneo argues that the Schiavone defendants and Reed Rubin were a “group” within the meaning of § 13(d)(3) of the Exchange Act, and were required to file a Schedule 13D statement by reason of their purchases and holding of Coreneo shares prior to July 3, 1973. More specifically, Coreneo maintains that the district court erroneously required it to show that Rubin and the Schiavone defendants conspired or agreed to acquire Coreneo stock- before July 3 whereas under the decision of this court in GAF Corp. v. Milstein, 453 F.2d 709 (2d Cir. 1971), cert. denied, 406 U.S. 910, 92 S.Ct. 1610, 31 L. Ed.2d 821 (1972), as opposed to the decision of the Seventh Circuit in Bath Industries, Inc. v. Blot, 427 F.2d 97 (7th Cir. 1970), a plaintiff must show only that the defendants conspired to acquire or hold more than 5% of a company’s stock.

Judge Ward’s reference to the necessity of showing a conspiracy to acquire Coreneo stock merely summarized the language of Corenco’s own complaint, which alleged that “at least as early as January 1973” Joel Schiavone had agreed with Reed Rubin to acquire over 5% of Coreneo stock “and/or to acquire control of Coreneo,” that pursuant to this agreement Joel Schiavone and Reed Rubin secretly acquired substantial amounts of Coreneo stock (Par. 10) and that “while owning in excess of 5% of such securities [they] agreed to act in concert to acquire control of Corenco” (Par. 22). In any event the distinction between an agreement to “acquire” and an agreement to “hold” appears immaterial in this case since Judge Ward found insufficient evidence of any agreement whatsoever between Rubin and Schiavone defendants regarding their respective holdings of Coreneo stock. It is true that Michael Schiavone controlled 4.8% of Corenco’s outstanding shares. Rubin, assuming for present purposes that he exercised sufficient dominion over the three accounts for which he had purchased shares, would have controlled another 4.996%. These percentages indicate an acute awareness on the part of both parties of the 5% figure fixed by § 13(d). However, absent an agreement between them a “group” would not exist. While it is charged that Rubin met several times with Joel Schiavone during the period of Michael Schiavone’s purchases, Judge Ward noted that Rubin’s fee depended on Corenco acquiring Schiavone rather than vice versa and that some Corenco stock was actually sold out of the accounts allegedly controlled by Rubin during the period of the supposed conspiracy. Upon this record we cannot conclude that Judge Ward’s finding of no agreement or conspiracy was “clearly erroneous.”

The Schiavones’ Counterclaim Against Corenco

Turning to the Schiavone defendants’ counterclaim that Corenco’s management and their affiliates were a “group” within the meaning of § 13(d)(3) and were required to file a Schedule 13D statement by reason of their pooling of their Corenco shares for the purpose of defeating the tender offer, it is unclear what “independent interest” protected by the statute exists which gives the Schiavone defendants standing to assert their counterclaim. See Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937, 944-946 (2d Cir. 1969). Assuming they have standing, however, we are satisfied that the members of Corenco’s management were not required to file individual Schedule 13D statements when they agreed to pool their interests to fight the threatened takeover.

Section 14(d)(4) of the Exchange Act specifically requires the disclosure of certain information when the manage- ' ment of a company advises its shareholders to reject a tender offer. Cor-enco’s management complied with this section when it filed a form 14D. Since the Exchange Act contains a specific provision governing the disclosures required of a target company’s management, it would be pointless to superimpose requirements found in another section, which does not deal specifically with management disclosures. The reliance placed by the Schiavone defendants on GAF v. Milstein, supra, is misplaced. There the court expressly declined to decide the question “whether management groups which expressly agree to pool their interests to fight a potential takeover are subject to section 13(d).” 453 F.2d at 719 n. 20.

Conclusion

We affirm the district court in all respects except that we remand the case to it for a determination, in the exercise of its discretion, whether the Schiavone defendants should be required to disclose their financials for the past five years rather than the past two years. If it should so conclude, the form of any such disclosures might be approved by the district court without necessarily awaiting approval by an administrative agency.

      . Corenco does not appeal from dismissal of Count 1 of its complaint, charging antitrust violations, or Count 5, which alleges that the Schiavone defendants solicited proxies for Joseph A. Schiavone and Joel Schiavone to vote the common stock of Corenco' without supplying the persons solicited with a written proxy statement containing the information specified in Schedule 14A promulgated by the SEC under the Exchange Act.

      . Although Rubin actually purchased the Corenco shares for his father, he claimed that the only control he had over these shares was the power he was given by a specific proxy to vote the shares at a specific annual meeting.

      . The principal contributor to this Research Institute was the Samuel Rubin Foundation.

      . On July 16, 1973, the bid price for Corenco stock which was trading over-the-counter was $26.50. The asked price was $28.00 per share.

      . The announcement was subsequently republished in at least five other newspapers.

      . Corenco alleges that Schiavone misled the court and Corenco into believing that the financial information furnished in the amendment represented the entire data disclosed to First Pennsylvania. However, the loan agreement between Schiavone and that bank, then in Corenco’s possession, revealed that five years’ financials had been furnished to the bank.

      . In its brief, Coreneo points to Joel Schia-vone’s testimony in these proceedings that the reason for not disclosing any financial information regarding the Schiavone companies was “that Coreneo stockholders may not have tendered had this information been available to them.”

      . It is significant that, although the SEC, acting pursuant to authority delegated to it by §§ 13(d) and 14(d) of the 1934 Exchange Act, adopted rules requiring certain diselo-sures to be made by a cash tender offeror, information as to the offeror’s financial condition was not specified. Furthermore, the SEO’s proxy rules (Reg. 14A under Securities Exchange Act of 1934), which form the basis of the disclosures the Willianas Act seeks to require, see S.Rep.No.550, 90th Cong., 1st Sess. 3 (1967), do not obligate the disclosure of such financial information regarding a company or group seeking control.

      . In contrast, where an exchange offer is made, information as to the financial operations and condition of the offeror is clearly of material significance since it enables the offeree to form a judgment as to the value of the package offered in exchange.

      . We do not believe that the statement in the Schiavone defendants’ affidavit in support of its motion under Rule 60(b) (5) and (6) was deliberately deceptive since the adequacy of the proposed financial disclosures had not been challenged. Any attempt to conceal the fact that the proposed disclosures were not as extensive as those made to First Pennsylvania would have been pointless. Furthermore, the SEC, which reviewed the financials for the last two years and made certain suggestions that have been incorporated in the financial information contained in Amendment 7, did not suggest inclusion of earlier financials, possibly for the reason that its Rule 14a-3, dealing with the analogous procedure for disclosure of financial information in annual reports used in proxy statements, requires disclosure of only the last two years financials. In addition, Schiavone’s first quarter earnings for 1973, which are disclosed in Amendment 3, represented a substantial improvement over the earlier two years.

      . The financial statements of Schiavone and Michael Schiavone which were incorporated in the new amendments to Schiavone’s Schedule 13D statement were unaudited. When the amendments were filed with the SEC, the staff suggested that certain changes be made. These suggested changes were incorporated in Amendment 7 which was filed with the SEC on August 31, 1973.

      . Section 13(d) (3) provides:
      “When two or more persons act as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of an issuer, such syndicate -or group shall be deemed a ‘person’ for the purposes of this subsection.”

      . Judge Ward began his discussion of Cor-eneo’s claim under § 13(d) by writing: “It is essential to Corenco’s claim under section 13(d) of the 1934 Act that Coreneo prove an agreement or conspiracy between the Schiavone defendants and Reed Rubin to ac' quire Coreneo stock.”

      . Section 14(d) (4) provides:
      “Any solicitation or recommendation to the holders of ... a security to accept or reject a tender offer shall be made in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors,” adult. The decision to waive jurisdiction is, by implication, left in the discretion of the juvenile court judge.