176 So. 3d 821
Ala.2015Background
- Walter Energy sued the Audley defendants (Treger and Audley entities) over alleged pump-and-dump manipulation of Walter Energy stock after acquiring Western Coal; Audley previously held a large minority stake in Western Coal.
- Audley’s July 2011 letter to Walter Energy publicly contemplated an acquisition at a price higher than the then-current stock price and sought responses by a deadline.
- Audley allegedly caused spikes in Walter Energy’s stock price, prompting substantial insider sales of Walter Energy stock by Audley
- Media reports in fall 2011 and beyond suggested takeover interest, which Walter Energy contends the Audley defendants used to inflate the stock price.
- Walter Energy amended its complaint multiple times to assert Alabama Securities Act, fraud, and tort claims; the Jefferson County trial court dismissed all claims under Rule 12(b)(6) with prejudice in May 2014; Walter Energy appealed.
- The Alabama Supreme Court affirmatively held that the Alabama Securities Act claim failed for lack of proper Alabama offer/receipt elements and that the Audley defendants were not liable for intentional interference because they were participants in interwoven corporate relationships.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 8-6-17(a) applies to Audley’s conduct | Walter Energy argues the conduct violated § 8-6-17(a) | Audley argues lack of Alabama offer/receipt | No; § 8-6-17(a) claim fails |
| Whether Audley were strangers to Walter Energy’s relationships | Walter Energy contends Audley interfered with its relationships | Audley contends they were not strangers; they had economic interests | Audley are not strangers; dismissal upheld |
Key Cases Cited
- Waddell & Reed, Inc. v. United Investors Life Insurance Co., 875 So.2d 1143 (Ala.2003) (defines 'stranger' vs. participant in a business relationship)
- White Sands Group, L.L.C. v. PRS II, LLC, 32 So.3d 5 (Ala.2009) (restates elements of tortious interference with contractual/business relations)
- Crosslin v. Health Care Authority of Huntsville, 5 So.3d 1193 (Ala.2008) (standard for Rule 12(b)(6) de novo review of dismissal)
- Belcher v. Jefferson Cnty. Bd. of Educ., 474 So.2d 1063 (Ala.1985) (affirming dismissal for lack of requisite elements)
- Lloyd v. Community Hosp. of Andalusia, Inc., 421 So.2d 112 (Ala.1982) (stated principle on pleading essential elements)