In the case of Santa Fe Industries, Inc. v. Green et al., 1976, minority shareholders in Kirby Lumber Corporation filed a lawsuit against Santa Fe Industries (SFI), which had acquired majority control over Kirby and then initiated a "short-form" merger to buy out the remaining shares. The plaintiffs argued that SFI's actions violated both federal securities laws and their fiduciary duties under state law by not providing fair value for their shares or sufficient information about the transaction. However, the Supreme Court ruled in favor of SFI on both counts. The court held that there was no violation of federal securities laws because these are intended to prevent deceptive or manipulative practices rather than ensure fairness in corporate transactions; since all relevant facts were disclosed by SFI, they did not engage in any such practices. As for breach of fiduciary duty under state law, this claim was dismissed as it fell outside the scope of issues that can be raised under section 10(b) and Rule 10b-5 - provisions used to challenge fraudulent activities related to purchase/sale of securities.

In the dissenting opinion for Santa Fe Industries, Inc. v. Green et al., Justice Brennan disagreed with the majority's view that no claim was stated under Rule 10b-5 because there was full disclosure of all material facts and therefore no deception or manipulation occurred. He argued that a fiduciary duty exists between controlling shareholders and minority shareholders in a short-form merger situation, which requires not just complete disclosure but also fairness in dealing. In his view, this fiduciary obligation includes an inherent duty to deal fairly and honestly with minority shareholders by offering them a fair price for their shares during such mergers. Therefore, he believed that if these obligations were breached it could constitute "manipulative" conduct within the meaning of Section 10(b) even without any misrepresentation or nondisclosure.