Wolverine Flagship Fund Trading Limited v. American Oriental Bioengineering, Inc., 444 N.J. Super. 530 (App. Div. 2016). This opinion, issued today by Judge St. John, involved the denial of injunctive relief by the Chancery Division. The key issue was one purely of law, the interpretation of section 8-112 of the Uniform Commercial Code, N.J.S.A. 12A:8-112. Because this was an issue of law, the Appellate Division invoked de novo review.
Section 8-112 prescribes “rules concerning the process by which a creditor can reach certificated securities owned by a debtor.” Subsection (a) of that statute contains a general rule– “a certificated security may be reached by a creditor only by actual seizure of the security certificate”– and two exceptions: where the debtor has surrendered the certificate to the issuer, or “as otherwise provided in subsection d” of section 8-112. Judge St. John found that the use of “only” in the general rule “implies that the two exceptions named are the only exceptions applicable to the subsection.” That conclusion was based on both “common sense” and the maxim of expressio unius est exclusio alterius (the expression of one thing signifies the exclusion of all others).
Plaintiffs, however, cited subsection (e) of that statute, claiming that that subsection, which refers to means “allowed at law or in equity,” goes beyond the two stated exceptions in subsection (a) and supported plaintiffs’ request for injunctive relief. Judge St. John did not agree. Plaintiffs’ interpretation would have meant that subsection (e) would have swallowed subsection (a). The principle of statutory interpretation that an entire statute is to be read together called for the rejection of plaintiffs’ position.
Judge St. John found persuasive cases from the Eleventh Circuit Court of Appeals and a Texas intermediate appellate court. He distinguished the two cases that plaintiffs relied upon, which came from the Second Circuit Court of Appeals and a Florida intermediate appellate court.
Finally, Judge St. John addressed plaintiffs’ argument that public policy favored them. He found that public policy cut both ways, and that the court lacked the authority or the expertise to rule based on particular public policy considerations. Accordingly, the Chancery Division’s decision was affirmed.