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Ash v. Cort

decided: April 16, 1974.

RICHARD A. ASH, ON BEHALF OF HIMSELF, AND ON BEHALF OF BETHLEHEM STEEL CORPORATION, APPELLANT
v.
STEWART S. CORT, LEWIS W. FOY, EDWARD D. BICKFORD, BERNARD D. BROEKER, ALBERT M. REED, C. THOMPSON STOTT, IVOR D. SIMS, CROWDUS BAKER, JESS H. DAVIS, THOMAS S. GATES, ROBERT B. HOBBS, AND GEORGE P. JENKINS, ALL BEING DIRECTORS OF BETHLEHEM STEEL CORPORATION, APPELLEES, AND BETHLEHEM STEEL CORPORATION, NOMINAL DEFENDANT, RICHARD A. ASH, APPELLANT



(D.C. Civil Action No. 72-1925) APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Seitz, Chief Judge, Hastie and Aldisert, Circuit Judges. Aldisert, Circuit Judge, dissenting.

Author: Seitz

Opinion OF THE COURT

SEITZ, Chief Judge.

Plaintiff, a stockholder in Bethlehem Steel Corporation and registered to vote in federal elections, appeals from an order of the District Court for the Eastern District of Pennsylvania denying his request for an evidentiary hearing and granting defendants' motion for summary judgment. Defendants are directors of Bethlehem. The gravamen of plaintiff's complaint is that defendants caused Bethlehem to expend money to help secure the election of the Republican party's 1972 presidential candidate. Plaintiff asserts that the corporate expenditures, for an advertisement and a pamphlet, violated a federal prohibition on corporate campaign spending, 18 U.S.C. § 610 (1970), as amended (Supp. II 1972). Plaintiff, seeking an injunction and damages, invokes federal jurisdiction over this claim under 28 U.S.C. § 1331 (1970), making the requisite jurisdictional allegations.

The district court's order granting summary judgment merely recited that no material factual dispute existed and that defendants were not liable to plaintiff for the claimed violation of federal law. We presume that this assertion was bottomed on the findings and conclusions relied upon by the district court to support its earlier denial of a preliminary injunction. See 350 F. Supp. 227 (E.D. Pa. 1972). Defendants argue on appeal the propriety of those findings and conclusions and urge that the summary judgment be affirmed on that basis. The major points of the district court's decision are that plaintiff would have no cause of action from defendants' violation of 18 U.S.C. § 610 (1970), as amended (Supp. II 1972), and that, in any event, defendants did not violate § 610.

I.

Before addressing the points urged by defendants to justify and plaintiff to attack summary judgment, we must consider two matters of justiciability.

Mootness

In affirming the district court's earlier denial of a preliminary injunction, we limited our decision narrowly, holding only that the court's finding of no irreparable harm to plaintiff from denying the injunction was not clearly erroneous. 471 F.2d 811 (3d Cir. 1973). At that time, however, we noted that the question of mootness would have to be examined at a later point in these proceedings. Id. at 812. As originally drawn, plaintiff's complaint focused on the 1972 presidential election and sought to prevent corporate expenditures from influencing that election. That election is now history. Nonetheless, plaintiff alleges that defendants intend to make similar expenditures in future elections, and defendants, far from denying this, hotly defend their right to do so.

Controversies concerning elections often have presented mootness problems. See, e.g., Hall v. Beals, 396 U.S. 45, 24 L. Ed. 2d 214, 90 S. Ct. 200 (1969); Moore v. Ogilvie, 394 U.S. 814, 23 L. Ed. 2d 1, 89 S. Ct. 1493 (1969). These problems arise since election controversies almost always are spawned shortly before the election, seek prospective relief directed to the election, and reach appellate courts only after the election. Where the basis of such a controversy remains after an election and where the dispute is likely to recur, the case will not be found moot, even where prospective relief alone is sought. Moore v. Ogilvie, supra at 816. When this case was before us on appeal of the preliminary injunction denial, the complaint asserted pendent federal jurisdiction over a claim arising under state law; although the complaint was ambiguous, it apparently sought injunctive relief for defendants' alleged violation of federal law and, on behalf of the corporation, damages for the claimed state law violation. Our concern with mootness arose in this context.

Were plaintiff's federal claim pressed solely to secure injunctive relief, we would be required to determine whether plaintiff's bare allegation of defendants' intention to make future similar expenditures would support review, given no showing of a consistent pattern of such conduct and no assurance of plaintiff's continued ownership of Bethlehem stock. After proceedings resumed in the district court, however, the plaintiff amended his complaint and now clearly demands, in addition to injunctive relief, damages on behalf of the corporation for violation of § 610.*fn1 Even if plaintiff has no live claim for injunctive relief, the dispute over damages renders this controversy justiciable. See Powell v. McCormack, 395 U.S. 486, 495-500, 23 L. Ed. 2d 491, 89 S. Ct. 1944 (1969). We need not decide whether plaintiff's claim would be moot if he did not seek damages as well as an injunction.*fn2

Question also is raised concerning plaintiff's standing to prosecute this action. As a constitutional matter, all that is required for standing is that the plaintiff have been personally injured or be threatened with such injury and that the injury be directly related to plaintiff's legal claim. Flast v. Cohen, 392 U.S. 83, 101, 20 L. Ed. 2d 947, 88 S. Ct. 1942 (1968); Baker v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962). Plaintiff alleges economic injury, as a stockholder whose interest in Bethlehem is worth less than it would be had defendants not caused the challenged expenditures to be made, and further injury as a citizen and voter whose ability to secure a responsive federal government has been lessened. While these injuries, tangible and intangible, may be small, they are personal to plaintiff, directly related to his claim, and may be remedied by the injunctive and damage relief sought; hence they are sufficient to support plaintiff's standing. See United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 685-89, 37 L. Ed. 2d 254, 93 S. Ct. 2405 (1973), and cases cited id. at 689, n. 15.

Plaintiff's standing is not defeated by the fact that his injuries are shared by countless others. Although the Supreme Court's language in Frothingham v. Mellon, 262 U.S. 447, 487, 43 S. Ct. 597, 67 L. Ed. 1078 (1923), indicated that an injury to many might confer standing to none, Flast intimates that Frothingham stated policy, not constitutional dogma, Flast v. Cohen, supra at 93-94, and SCRAP declared that standing is not lost because the harm asserted is universally shared, United States v. SCRAP, supra at 686-88. Finally, because we are asked not to review administrative action but to adjudicate private rights, we need not determine whether the statute asserted to provide plaintiff's cause of action places him outside the class permitted to invoke our processes. Cf. Davis v. Romney, 490 F.2d 1360, slip op. at 3-5 (3d Cir. 1974); compare Flast v. Cohen, supra at 101-06, and Baker v. Carr, supra at 204-08, with Sierra Club v. Morton, 405 U.S. 727, 733, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972), and Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153-54, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970). Alleging personal injury from defendants' violation of a federal statute, plaintiff may invoke our jurisdiction under 28 U.S.C. § 1331 (1970); questions of statutory construction will be met in determining whether plaintiff has stated a cause of action and in ruling on the merits of his claim.

II.

The district court's decision that defendants were entitled to judgment as a matter of law rested on several legal conclusions, among them that plaintiff failed to state a cause of action. Plaintiff relies upon 18 U.S.C. § 610 (1970), as amended (Supp. II. 1972), as providing his cause of action. Section 610, inter alia, makes it "unlawful for . . . any corporation . . . to make a contribution or expenditure in connection with any [federal] election . . .," and provides criminal penalties for its violation. Plaintiff contends that, although it expressly provides only penal sanctions, § 610 "implies" a cause of action in his favor.

Standards for Implied Cause

To find a cause of action "implied" in a statute, we must determine (1) that the provision violated was designed to protect a class of persons including the plaintiff from the harm of which plaintiff complains and (2) that it is appropriate, in light of the statute's purposes, to afford plaintiff the remedy sought. Bivens v. Six Unknown Named Agents, 403 U.S. 388, 395-97, 29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971); Wyandotte Co. v. United States, 389 U.S. 191, 200-02, 88 S. Ct. 379, 19 L. Ed. 2d 407 (1967); J. I. Case Co. v. Borak, 377 U.S. 426, 431-35, 12 L. Ed. 2d 423, 84 S. Ct. 1555 (1964). Finding an implied cause pursuant to these criteria is not entirely an exercise in divining legislative intent. Certainly, legislative intent is relevant; where the legislature clearly has indicated its intent to grant or withhold a cause of action, implicitly or explicitly, courts will give effect to that intent. E.g., National Railroad Passenger Corp. v. National Association of Railroad Passengers, 414 U.S. 453, 94 S. Ct. 690, 38 L. Ed. 2d 646, 42 U.S.L.W. 4132, 4134-35 (U.S. January 9, 1974). Absent some reasonably clear indication of legislative attention to the possible creation of a cause of action, however, courts ascertain the policies underlying the substantive law and determine the propriety, as a means of effectuating those policies, of affording litigants a particular remedy. Bivens v. Six Unknown Named Agents, supra at 395-97 (opinion of the Court), and 402-03, n. 4 (Harlan, J., concurring); Holloway v. Bristol-Meyers Corp., 158 U.S. App. D.C. 207, 485 F.2d 986, 989-99 (D.C. Cir. 1973).

We are urged to find that this process of judicial policy consideration to determine whether an "implied" cause of action can be asserted was rejected by the Supreme Court in National Railroad Passenger Corp. v. National Association of Railroad Passengers, supra (hereinafter " Amtrak "). Relying on the maxim expressio unis est exclusio alterius [expression of one thing is exclusion of others], the Court declared in Amtrak that ". . . when legislation expressly provides a particular remedy or remedies, courts should not expand the coverage of the statute to subsume other remedies." Id. at 4134. This rule of statutory construction does not alter the process used to determine if a cause should be inferred in the absence of statutory language indicating legislative intent; rather, it aids the court merely in determining when legislative intent to preclude a remedy can be fairly implied.*fn3

For the Amtrak rule to apply, the statute must expressly provide the plaintiff a remedy that may logically be said to be exclusive. In Amtrak, the remedy expressly provided to correct the harm of which plaintiffs complained was a civil action prosecuted by the Attorney General. 45 U.S.C. § 547 (1970). In the instant case, no express civil action is provided to remedy plaintiff's, or any other, alleged injury.*fn3a Only a criminal sanction is expressly provided for violation of § 610. Courts have consistently held that statutes providing for criminal liability do not preclude assertion of private causes of action. E.g., Wyandotte Co. v. United States, supra at 200-02; Texas & Pacific Railway Co. v. Rigsby, 241 U.S. 33, 39-41, 60 L. Ed. 874, 36 S. Ct. 482 (1916). In Rigsby the Supreme Court, inferring a private cause of action for violation of a criminal provision, ...


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