Ash v. Cort

496 F.2d 416
Court of Appeals for the Third Circuit·Decided April 16, 1974·No. No. 73-1739·Published·Cited by 22 cases

Opinions

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 sum[419] mary 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, 90 S.Ct. 200, 24 L.Ed.2d 214 (1969); Moore v. Ogilvie, 394 U.S. 814, 89 S.Ct. 1493, 23 L.Ed.2d 1 (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,, 394 U.S. at 816, 89 S.Ct. 1493. 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 § 610.1 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, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). We need not decide whether [420] plaintiff’s claim would be moot if he did not seek damages as well as an injunction.2

Standings

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, 88 S.Ct. 1942, 20 L.Ed.2d 947 (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, 685-689, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973), and cases cited id. at 689, n. 15, 93 S.Ct. 2405.

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Ash v. Cort
496 F.2d 416 (Third Circuit, 1974)