Respondent stockholder brought this action seeking damages in
favor of petitioner Bethlehem Steel Corp., a Delaware corporation,
and injunctive relief because of advertisements in connection with
the 1972 Presidential election that petitioner corporate directors
had authorized from general corporate funds in alleged violation of
18 U.S.C. § 610, which prohibits corporations from making
contributions or expenditures in connection with specified federal
elections. Respondent alleged jurisdiction under 28 U.S.C. § 1331,
and sought to state a private claim for relief under 18 U.S.C. §
610, and also invoked pendent jurisdiction for an
ultra
vires claim under Delaware law. The District Court's denial of
a preliminary injunction was upheld on appeal, following which
respondent dropped the pendent claim rather than post security for
expenses under state law before proceeding with that claim. The
District Court then granted petitioners' motion for summary
judgment. The Court of Appeals reversed, holding that the passage
of the election had not mooted the case, since damages were sought,
and that
"a private cause of action, whether brought by a citizen to
secure injunctive relief or by a stockholder to secure injunctive
or derivative damage relief [is] proper to remedy violation of §
610."
After the Court of Appeals decision Congress enacted the Federal
Election Campaign Act Amendments of 1974 (hereinafter the
Amendments), under which,
inter alia, the Federal Election
Commission can receive citizen complaints of statutory violations
and, where warranted, request the Attorney General to seek
injunctive action.
Held:
1. The Amendments constitute an intervening law that relegates
to the Commission's cognizance respondent's complaint as citizen or
stockholder for injunctive relief against any alleged violations of
§ 610 in future elections, since this Court must examine this case
according to the law existing at the time of its decision.
United States v. Schooner
Peggy, 1 Cranch 103,
5
U. S. 110;
Bradley v. Richmond School Board,
416 U. S. 696,
416 U. S. 711.
Pp.
422 U. S.
74-77.
Page 422 U. S. 67
2. Respondent stockholder's derivative suit with regard to the
alleged 1972 violation cannot be implied under 18 U.S.C. § 610, and
respondent's remedy, if any, must be under Delaware's corporation
law. Pp.
422 U. S.
77-85.
(a) Section 610 was primarily concerned not with the internal
relations between corporations and stockholders, but with
corporations as a source of aggregated wealth, and therefore of
potential corrupting influence; thus, this statute differs from
other criminal statutes in which private causes of action have been
inferred because of a clearly articulated federal right in the
plaintiff,
e.g., Bivens v. Six Unknown Federal Narcotics
Agents, 403 U. S. 388, or
a pervasive legislative scheme governing the relationship between
the plaintiff class and the defendant class in a particular regard,
e.g., J. I. Case Co. v. Borak, 377 U.
S. 426. Pp.
422 U. S.
78-82.
(b) The legislative history of § 610 suggests no congressional
intention to vest in corporate shareholders a federal right to
damages for a violation of the statute. Pp.
422 U. S.
82-84.
(c) A private remedy would not further the statutory purpose of
dulling corporate influence on federal elections, since any
compelled repayment to the corporation might well not deter the
initial violation. P.
422 U. S.
84.
(d) The cause of action is one traditionally relegated to state
law in an area of primarily state concern. In addition to the
ultra vires claim urged by respondent the alleged misuse
of corporate funds might, under the law of some States, give rise
to a cause of action for breach of a fiduciary duty. Pp.
422 U. S.
84-85.
496 F.2d 416, reversed.
BRENNAN, J., delivered the opinion for a unanimous Court.
Page 422 U. S. 68
MR. JUSTICE BRENNAN delivered the opinion of the Court.
There are other questions, but the principal issue presented for
decision is whether a private cause of action for damages against
corporate directors is to be implied in favor of a corporate
stockholder under 18 U.S.C. § 610, a criminal statute prohibiting
corporations from making "a contribution or expenditure in
connection with any election at which Presidential and Vice
Presidential electors . . . are to be voted for." [
Footnote 1] We conclude
Page 422 U. S. 69
that implication of such a federal cause of action is not
suggested by the legislative context of § 610 or required to
accomplish Congress' purposes in enacting the statute. We therefore
have no occasion to address
Page 422 U. S. 70
the questions whether § 610, properly construed, proscribes the
expenditures alleged in this case, or whether the statute is
unconstitutional as violative of the First Amendment or of the
equal protection component of the Due Process Clause of the Fifth
Amendment.
I
In August and September, 1972, an advertisement with the caption
"I say let's keep the campaign honest. Mobilize
truth squads'"
appeared in various national publications, including Time,
Newsweek, and U.S. News and World Report, and in 19 local
newspapers in communities where Bethlehem Steel Corp. (Bethlehem),
a Delaware corporation, has plants. Reprints of the advertisement,
which consisted mainly of quotations from a speech by petitioner
Stewart S. Cort, chairman of the board of directors of Bethlehem,
were included with the September 11, 1972, quarterly dividend
checks mailed to the stockholders of the corporation. The main text
of the advertisement appealed to the electorate to "encourage
responsible, honest, and truthful campaigning." It alleged that
vigilance was needed because "careless rhetoric and accusations . .
. are being thrown around these days -- their main target being the
business community." In italics, under a picture of Mr. Cort, the
advertisement quoted "the following statement made by a political
candidate: `The time has come for a tax system that says to big
business -- you must pay your fair share.'" It then printed Mr.
Cort's rejoinder to this in his speech, including his opinion that
to say "large corporations [are] not carrying their fair share of
the tax burden" is "baloney." The advertisement concluded with an
offer to send, on request, copies of Mr. Cort's entire speech
[Footnote 2] and a folder
"telling how to
Page 422 U. S.
71
go about activating Truth Squads." [Footnote 3] These publications could be obtained free
from the Public Affairs Department of Bethlehem. It is stipulated
that the entire costs of the advertisements and various mailings
were paid from Bethlehem's general corporate funds. App. A29-A30;
350 F.
Supp. 227, 229 (ED Pa.1972).
Respondent owns 50 shares of Bethlehem stock and was qualified
to vote in the 1972 Presidential election. He filed this suit in
the United States District Court for the Eastern District of
Pennsylvania on September 28, 1972, on behalf of himself and,
derivatively, on behalf of Bethlehem. The complaint specified two
separate and distinct bases for jurisdiction and relief. Count I
alleged jurisdiction under 28 U.S.C. § 1331 and sought to state a
private claim for relief under 18 U.S.C. § 610, which, as
mentioned, in terms provides only for a criminal penalty. Count II
invoked pendent jurisdiction for a claim under Delaware law,
alleging that the corporate campaign expenditures were "
ultra
vires, unlawful and [a] willful, wanton and gross breach of
[defendants'] duty owed to [Bethlehem]." Immediate injunctive
relief against further corporate expenditures in connection with
the 1972 Presidential election or any
Page 422 U. S. 72
future campaign was sought, as well as compensatory and punitive
damages in favor of the corporation.
The District Court denied a preliminary injunction on October
25, 1972.
350 F.
Supp. 227. While the denial was supported on three grounds,
[
Footnote 4] it was upheld on
appeal to the Court of Appeals for the Third Circuit only on the
narrow ground that irreparable harm was not shown. 471 F.2d 811
(1973). [
Footnote 5]
After the affirmance on appeal, petitioners sought an order
requiring respondent to post security for expenses as required by
Pennsylvania law. The court declined to order such security with
regard to the federal cause of action alleged in Count I, but did
order respondent to post $35,000 before proceeding with the pendent
claim under Count II. Rather than post security, respondent filed
an amended complaint, which dropped Count II, the separate state
cause of action, from the case. [
Footnote 6]
Page 422 U. S. 73
The District Court then granted petitioners' motion for summary
judgment without opinion. The Court of Appeals reversed, 496 F.2d
416 (1974). The Court of
Page 422 U. S. 74
Appeals held that, since the amended complaint sought damages
for the corporation for violation of § 610, the controversy was not
moot, although the election which occasioned it was past. The Court
of Appeals held further that
"a private cause of action, whether brought by a citizen to
secure injunctive relief or by a stockholder to secure injunctive
or derivative damage relief, [is] proper to remedy violation of §
610."
Id. at 424. We granted certiorari, 419 U.S. 992 (1974).
We reverse.
II
We consider first the holding of the Court of Appeals that
respondent has "a private cause of action . . . [as] a citizen [or
as a stockholder] to secure injunctive relief." The 1972
Presidential election is history, and respondent as citizen or
stockholder seeks injunctive relief only as to future elections. In
that circumstance, a statute enacted after the decision of the
Court of Appeals, the Federal Election Campaign Act Amendments of
1974, Pub.L. 93-443, 88 Stat. 1263 (Amendments) (amending the
Federal Election Campaign Act of 1971, 86 Stat. 3), requires
reversal of the holding of the Court of Appeals.
In terms, § 610 is only a criminal statute, providing a fine or
imprisonment for its violation. At the time this suit was filed,
there was no statutory provision for civil enforcement of § 610,
whether by private parties or by a Government agency. But the
Amendments created a Federal Election Commission, 2 U.S.C. §
437c(a)(1) (1970 ed., Supp. IV); [
Footnote 7] established an administrative
Page 422 U. S. 75
procedure for processing complaints of alleged violations of §
610 after January 1, 1975, 2 U.S.C. § 437g (1970 ed., Supp. IV),
and § 410, note following 2 U.S.C. § 431 (1970 ed., Supp. IV); and
provided that "[a]ny person who believes a violation . . . [of §
610] has occurred may file a complaint with the Commission." 2
U.S.C. § 437g(a)(1)(A) (1970 ed., Supp. IV). The Commission must
either investigate the complaint or refer the complaint to the
Attorney General, 2 U.S.C. §§ 437g(a)(2)(A) and (b) (1970 ed.,
Supp. IV). [
Footnote 8] If the
Commission chooses to investigate the complaint, and after
investigation determines that "any person has engaged or is about
to engage in any acts or practices which constitute or will
constitute a violation" of § 610, the Commission may request the
Attorney General to "institute a civil action for relief, including
a permanent or temporary injunction, restraining order, or any
other appropriate order. . . ." 2 U.S.C. § 437g(a)(7) (1970 ed.,
Supp. IV). And 2 U.S.C. § 437c(b) (1970 ed., Supp. IV), expressly
vests the Commission with "primary jurisdiction" over any claimed
violation of § 610 within its
Page 422 U. S. 76
purview. [
Footnote 9]
Consequently, a complainant seeking as citizen or stockholder to
enjoin alleged violations of § 610 in future elections must
henceforth pursue the statutory remedy of a complaint to the
Commission, and invoke its authority to request the Attorney
General to seek the injunctive relief. H.R.Conf.Rep. No. 93-1438,
p. 94 (1974). Thus, the Amendments constitute an intervening law
that relegates to the Commission's cognizance respondent's
complaint as citizen or stockholder for injunctive relief against
any alleged violations of § 610 in future elections. In that
circumstance, the holding of the Court of Appeals must be reversed,
for our duty is to decide this case according to the law existing
at the time of our decision.
The governing rule was announced by Mr. Chief Justice Marshall
in
United States v. Schooner
Peggy, 1 Cranch 103,
5
U. S. 110 (1801):
"It is in the general true that the province of an
Page 422 U. S. 77
appellate court is only to enquire whether a judgment when
rendered was erroneous or not. But if, subsequent to the judgment
and before the decision of the appellate court, a law intervenes
and positively changes the rule which governs, the law must be
obeyed, or its obligation denied. If the law be constitutional . .
. , I know of no court which can contest its obligation. . . . In
such a case, the court must decide according to existing laws, and
if it be necessary to set aside a judgment, rightful when rendered
but which cannot be affirmed but in violation of law, the judgment
must be set aside."
We most recently reaffirmed the principle of
Schooner
Peggy in
Bradley v. Richmond School Board,
416 U. S. 696,
416 U. S. 711
(1974), where we said:
"We anchor our holding in this case on the principle that a
court is to apply the law in effect at the time it renders its
decision, unless doing so would result in manifest injustice or
there is statutory direction or legislative history to the
contrary."
There is no "statutory direction or legislative history to the
contrary" in or respecting the Amendments, nor is there any
possible "manifest injustice" in requiring respondent to pursue
with respect to alleged violations which have yet to occur the
statutory remedy for injunctive relief created by the
Amendments.
III
Our conclusion in
422 U. S. for
respondent seeks damages only derivatively as stockholder.
Therefore, we turn next to the holding of the Court of Appeals that
"a private cause of action . . . by a stockholder to secure . . .
derivative damage relief [is] proper to remedy violation of § 610."
We hold that such relief
Page 422 U. S. 78
is not available with regard to a 1972 violation under § 610
itself, but rather is available, if at all, under Delaware law
governing corporations. [
Footnote 10]
In determining whether a private remedy is implicit in a statute
not expressly providing one, several factors are relevant. First,
is the plaintiff "one of the class for whose
especial
benefit the statute was enacted,"
Texas & Pacific R. Co. v.
Rigsby, 241 U. S. 33,
241 U. S. 39
(1916) (emphasis supplied) -- that is, does the statute create a
federal right in favor of the plaintiff? Second, is there any
indication of legislative intent, explicit or implicit, either to
create such a remedy or to deny one?
See, e.g., National
Railroad Passenger Corp. v. National Assn. of Railroad
Passengers, 414 U. S. 453,
414 U. S. 458,
414 U. S. 460
(1974) (
Amtrak). Third, is it consistent with the
underlying purposes of the legislative scheme to imply such a
remedy for the plaintiff?
See, e.g., Amtrak, supra; Securities
Investor Protection Corp. v. Barbour, 421 U.
S. 412,
421 U. S. 423
(1975);
Calhoon v. Harvey, 379 U.
S. 134 (1964). And finally, is the cause of action one
traditionally relegated to state law, in an area basically the
concern of the States, so that it would be inappropriate to infer a
cause of action based solely on federal law?
See Wheelding v.
Wheeler, 373 U. S. 647,
373 U. S. 652
(1963);
cf. J. I. Case Co. v. Borak, 377 U.
S. 426,
377 U. S. 434
(1964);
Bivens v. Six Unknown Federal Narcotics Agents,
403 U. S. 388,
403 U. S.
394-395 (1971);
id. at
403 U. S. 400
(Harlan, J., concurring in judgment).
The dissenting judge in the Court of Appeals and petitioners
here suggest that, where a statute provides a penal remedy alone,
it cannot be regarded as creating a
Page 422 U. S. 79
right in any particular class of people.
"Every criminal statute is designed to protect some individual,
public, or social interest. . . . To find an implied civil cause of
action for the plaintiff in this case is to find an implied civil
right of action for every individual, social, or public interest
which might be invaded by violation of any criminal statute. To do
this is to conclude that Congress intended to enact a civil code
companion to the criminal code."
496 F.2d at 428-429 (Aldisert, J., dissenting).
Cf.
Nashville Milk Co. v. Carnation Co., 355 U.
S. 373,
355 U. S. 377
(1958).
Clearly, provision of a criminal penalty does not necessarily
preclude implication of a private cause of action for
damages.
Wyandotte Transportation Co. v. United States,
389 U. S. 191,
389 U. S.
201-202 (1967);
see also J. I. Case Co. v. Borak,
supra; Texas & Pacific R. Co. v. Rigsby, supra. However,
in
Wyandotte, Borak, and
Rigsby, there was at
least a statutory basis for inferring that a civil cause of action
of some sort lay in favor of someone. [
Footnote 11] Here, there was nothing more than
Page 422 U. S. 80
a bare criminal statute, with absolutely no indication that
civil enforcement of any kind was available to anyone.
We need not, however, go so far as to say that, in this
circumstance, a bare criminal statute can never be deemed
sufficiently protective of some special group so as to give rise to
a private cause of action by a member of that group. For the intent
to protect corporate shareholders particularly was, at best, a
subsidiary purpose of § 610, and the other relevant factors all
either are not helpful or militate against implying a private cause
of action.
First, § 610 is derived from the Act of January 26,
1907, [
Footnote 12]
which
"seems to have been motivated by two considerations. First, the
necessity for destroying the influence over elections which
corporations exercised through financial contribution. Second, the
feeling that corporate officials had no moral right to use
corporate funds for contribution to political parties without the
consent of the stockholders."
United States v. CIO, 335 U. S. 106,
335 U. S. 113
(1948).
See 40 Cong.Rec. 96 (1905)
Page 422 U. S. 81
(Annual Message of President Theodore Roosevelt). Respondent
bases his derivative action on the second purpose, claiming that
the intent to protect stockholders from use of their invested funds
for political purposes demonstrates that the statute set up a
federal right in shareholders not to have corporate funds used for
this purpose.
However, the legislative history of the 1907 Act, recited at
length in
United States v. Auto Workers, 352 U.
S. 567 (1957), demonstrates that the protection of
ordinary stockholders was, at best, a secondary concern. [
Footnote 13] Rather, the primary
purpose of the 1907 Act, and of the 1925 Federal Corrupt Practices
Act, 43 Stat. 1070, which
Page 422 U. S. 82
reenacted the 1907 provision with some changes as § 313 of that
Act,
see United States v. Auto Workers, supra at
352 U. S. 577,
was to assure that federal elections are "
free from the power
of money,'" 352 U.S. at 352 U. S. 574,
to eliminate "`the apparent hold on political parties which
business interests . . . seek and sometimes obtain by reason of
liberal campaign contributions.'" Id. at 352 U. S. 576,
quoting 65 Cong.Rec. 9507 (1924) (remarks of Sen. Robinson).
See also 352 U.S. at 352 U. S.
571-577. Thus, the legislation was primarily concerned
with corporations as a source of aggregated wealth, and therefore
of possible corrupting influence, and not directly with the
internal relations between the corporations and their stockholders.
In contrast, in those situations in which we have inferred a
federal private cause of action not expressly provided, there has
generally been a clearly articulated federal right in the
plaintiff, e.g., Bivens v. Six Unknown Federal Narcotics
Agents, supra, or a pervasive legislative scheme governing the
relationship between the plaintiff class and the defendant class in
a particular regard, e.g., J. I. Case Co. v. Borak,
supra.
Second, there is no indication whatever in the
legislative history of § 610 which suggests a congressional
intention to vest in corporate shareholders a federal right to
damages for violation of § 610. True, in situations in which it is
clear that federal law has granted a class of persons certain
rights, it is not necessary to show an intention to create a
private cause of action, although an explicit purpose to deny such
cause of action would be controlling. [
Footnote 14] But where, as here, it is at least
dubious
Page 422 U. S. 83
whether Congress intended to vest in the plaintiff class rights
broader than those provided by state regulation of corporations,
the fact that there is no suggestion at all that § 610 may give
rise to a suit for damages or, indeed, to any civil cause of action
reinforces the conclusion that the expectation, if any, was that
the relationship
Page 422 U. S. 84
between corporations and their stockholders would continue to be
entrusted entirely to state law.
Third, while "it is the duty of the courts to be alert
to provide such remedies as are necessary to make effective the
congressional purpose,"
J. I. Case Co. v. Borak, 377 U.S.
at
377 U. S. 433,
in this instance, the remedy sought would not aid the primary
congressional goal. Recovery of derivative damages by the
corporation for violation of § 610 would not cure the influence
which the use of corporate funds in the first instance may have had
on a federal election. Rather, such a remedy would only permit
directors, in effect, to "borrow" corporate funds for a time; the
later compelled repayment might well not deter the initial
violation, and would certainly not decrease the impact of the use
of such funds upon an election already past.
Fourth, and finally, for reasons already intimated, it
is entirely appropriate in this instance to relegate respondent and
others in his situation to whatever remedy is created by state law.
In addition to the
ultra vires action pressed here,
see n 6,
supra, the use of corporate funds in violation of federal
law may, under the law of some States, give rise to a cause of
action for breach of fiduciary duty.
See, e.g., Miller v.
American Telephone & Telegraph Co., 507 F.2d 759 (CA3
1974). Corporations are creatures of state law, and investors
commit their funds to corporate directors on the understanding
that, except where federal law expressly requires certain
responsibilities of directors with respect to stockholders, state
law will govern the internal affairs of the corporation. If, for
example, state law permits corporations to use corporate funds as
contributions in state elections,
see Miller, supra at 763
n. 4, shareholders are on notice that their funds may be so used,
and have no recourse under any federal statute. We are
Page 422 U. S. 85
necessarily reluctant to imply a federal right to recover funds
used in violation of a federal statute where the laws governing the
corporation may put a shareholder on notice that there may be no
such recovery.
In
Borak, supra, we said:
"[If] the law of the State happened to attach no responsibility
to the use of misleading proxy statements, the whole purpose of [§
14(a) of the Securities Exchange Act of 1934] might be
frustrated."
377 U.S. at
377 U. S.
434-435. Here, committing respondent to state-provided
remedies would have no such effect. In
Borak, the statute
involved was clearly an intrusion of federal law into the internal
affairs of corporations; to the extent that state law differed or
impeded suit, the congressional intent could be compromised in
state-created causes of action. In this case, Congress was
concerned not with regulating corporations as such, but with
dulling their impact upon federal elections. As we have seen, the
existence or nonexistence of a derivative cause of action for
damages would not aid or hinder this primary goal.
Because injunctive relief is not presently available in light of
the Amendments, and because implication of a federal right of
damages on behalf of a corporation under § 610 would intrude into
an area traditionally committed to state law without aiding the
main purpose of § 610, we reverse.
It is so ordered.
[
Footnote 1]
Title 18 U.S.C. § 610 (1970 ed. and Supp. III) provided in part
as follows when this suit was filed:
"Contributions or expenditures by national banks, corporations
or labor organizations."
"It is unlawful for any national bank, or any corporation
organized by authority of any law of Congress, to make a
contribution or expenditure in connection with any election to any
political office, or in connection with any primary election or
political convention or caucus held to select candidates for any
political office, or for any corporation whatever, or any labor
organization to make a contribution or expenditure in connection
with any election at which Presidential and Vice Presidential
electors or a Senator or Representative in, or a Delegate or
Resident Commissioner to Congress are to be voted for, or in
connection with any primary election or political convention or
caucus held to select candidates for any of the foregoing offices,
or for any candidate, political committee, or other person to
accept or receive any contribution prohibited by this section."
"Every corporation or labor organization which makes any
contribution or expenditure in violation of this section shall be
fined not more than $5,000; and every officer or director of any
corporation, or officer of any labor organization, who consents to
any contribution or expenditure by the corporation or labor
organization, as the case may be, and any person who accepts or
receives any contribution, in violation of this section, shall be
fined not more than $1,000 or imprisoned not more than one year, or
both; and if the violation was willful, shall be fined not more
than $10,000 or imprisoned not more than two years, or both."
"
* * * *"
"As used in this section, the phrase 'contribution or
expenditure' shall include any direct or indirect payment,
distribution, loan, advance, deposit, or gift of money, or any
services, or anything of value (except a loan of money by a
national or State bank made in accordance with the applicable
banking laws and regulations and in the ordinary course of
business) to any candidate, campaign committee, or political party
or organization, in connection with any election to any of the
offices referred to in this section; but shall not include
communications by a corporation to its stockholders and their
families or by a labor organization to its members and their
families on any subject; nonpartisan registration and
get-out-the-vote campaigns by a corporation aimed at its
stockholders and their families, or by a labor organization aimed
at its members and their families; the establishment,
administration, and solicitation of contributions to a separate
segregated fund to be utilized for political purposes by a
corporation or labor organization:
Provided, That it shall
be unlawful for such a fund to make a contribution or expenditure
by utilizing money or anything of value secured by physical force,
job discrimination, financial reprisals, or the threat of force,
job discrimination, or financial reprisal; or by dues, fees, or
other monies required as a condition of membership in a labor
organization or as a condition of employment, or by monies obtained
in any commercial transaction."
Definitions of various terms in § 610 are included in 18 U.S.C.
§ 591 (1970 ed., Supp. III).
The Federal Election Campaign Act Amendments of 1974, Pub.L.
93-443, 88 Stat. 1263, §§ 101(e), 102, increased substantially the
fines for violation of § 610 and changed many of the definitions in
§ 591 of the terms used in § 610.
[
Footnote 2]
The speech was a general defense of "big business" and the
current tax system. Although it named no political candidate or
party, it was in large part devoted to refuting statements, which
were quoted, by "a prominent presidential candidate." The complaint
in this case alleged that the "candidate" referred to was quite
clearly the Democratic candidate for President at the time (George
McGovern), App. A13. The speech concluded with the suggestion that
listeners "[m]obilize
truth squads'" -- organize to refute
"false or deceptive" statements and "outrageous
accusations."
[
Footnote 3]
The folder was entitled: "How you can help to keep the campaign
honest." It included suggestions for informing oneself about the
election, using research tools, refuting "a statement you know to
be wrong," and organizing friends and neighbors to do the same.
Unlike the speech and advertisement, the folder contained no
quotations from any political candidate, nor any discussion of
issues.
[
Footnote 4]
First, the District Court held that the penal sanctions provided
in § 610 are exclusive, and no private cause of action is to be
implied. 350 F. Supp. at 231. Second, the District Court held that
"the purpose of the advertisement was not to influence the election
of a specific candidate," and therefore that "the payment for the
advertisement did not constitute an
expenditure' within the
meaning of . . . Section 610." Id. at 231-232. Third, the
court found that,
"[i]n failing to prove a likelihood of success on the merits,
plaintiff has failed to prove that irreparable harm would result if
an injunction is not granted."
Id. at 232.
[
Footnote 5]
In affirming, the Court of Appeals observed that, while the
District Court's opinion seemed to preclude respondent from any
ultimate relief, the opinion addressed only a request for
preliminary relief, and therefore had to be considered only
tentative, leaving respondent free to renew his contentions on
final hearing. 471 F.2d at 812.
[
Footnote 6]
Respondent seems to invite the Court, in effect, to reinstate
Count II. We decline to do so. He argues, somewhat cryptically,
that the order to post security "was a nullity," since "[a] court
may not dismiss a theory of relief." Brief for Respondent 11 and n.
2. But the District Court did not dismiss the pendent state law
claim; respondent deliberately dropped it from his amended
complaint. Therefore, whatever the merits of the order for security
as applied only to the pendent claim,
see Sargent v. Genesco,
Inc., 337 F.
Supp. 1244 (MD Fla.1972),
cf. Cohen v. Beneficial Loan
Corp., 337 U. S. 541
(1949), respondent has foreclosed himself from consideration of a
state claim not now raised by his operative pleading.
Wheelding
v. Wheeler, 373 U. S. 647,
373 U. S. 652
(1963). We do not think that the pendent state law claim was
preserved in these circumstances by the verbatim repetition in the
amended complaint of a general allegation from the original
complaint that petitioners' conduct was "in violation of state and
federal law."
Therefore, there is not properly before us respondent's argument
that the acts of a Delaware corporation violative of United States
criminal statutes are
ultra vires acts under Delaware
corporation law, Del.Code Ann., Tit. 8, § 101; 6 W. Fletcher,
Cyclopedia Corporations 335 (1968 ed.), and that his
ultra
vires cause of action therefore "arises under" federal law,
that is, § 610, within the meaning of 28 U.S.C. § 1331. He relies
upon
Smith v. Kansas City Title Co., 255 U.
S. 180 (1921);
see also Wheelding v. Wheeler,
supra at
373 U. S.
659-660 (BRENNAN, J., dissenting). Not only was Count II
dropped from the case by respondent, and no argument addressed to
it made by him in the District Court or the Court of Appeals, but
he neither cross-petitioned nor raised the contention in his
Opposition to the Petition for Certiorari. Moreover, this Court
must necessarily depend upon the district courts and courts of
appeals for initial determinations of questions of state law;
indeed, our practice of deference to such determinations should
generally render unnecessary review of their decisions in this
respect.
Commissioner v. Estate of Bosch, 387 U.
S. 456,
387 U. S. 462
(1967);
Ragan v. Merchants Transfer Co., 337 U.
S. 530,
337 U. S. 534
(1949). Obviously, then, we should not undertake to decide such
questions, inherent in respondent's theory, in the first
instance.
In sum, in this case
"we see no cause for deviating from our normal policy of not
considering issues which have not been presented to the Court of
Appeals and which are not properly presented for review here."
Neely v. Eby Constr. Co., 386 U.
S. 317,
386 U. S. 330
(1967);
cf. Wiener v. United States, 357 U.
S. 349,
357 U. S. 351
n. (1958).
[
Footnote 7]
A Federal Election Commission was included in the Senate-passed
bill in 1971, but was eliminated in conference.
See Berry
& Goldman, Congress and Public Policy: A Study of the Federal
Election Campaign Act of 1971, 10 Harv.J.Legis. 331, 343, 354
(1973); S.Conf.Rep. No. 92-580, pp. 34-35 (1971); H.R.Conf.Rep. No.
92-752, pp. 34-35 (1971). The Commission in the Senate version was
given no explicit authority with regard to violations of § 610.
See S. 382, § 308(b), as passed Aug. 5, 1971 (3 Leg.Hist.
of Federal Election Campaign Act of 1971).
[
Footnote 8]
Other provisions of the Amendments which may have relevance to
private parties' complaints of violations of § 610 include 2 U.S.C.
§ 437g(a)(9) (1970 ed., Supp. IV), providing for judicial review at
the behest of "[a]ny party aggrieved" by any order granted in a
civil action filed by the Attorney General, and 2 U.S.C. § 437h(a)
(1970 ed., Supp. IV), permitting "any individual eligible to vote
in any election for the office of President of the United States"
to file "such actions . . . as may be appropriate to construe the
constitutionality of . . . [§ 610]."
[
Footnote 9]
The parties disagree upon whether this reference to "primary
jurisdiction" suggests that a complainant, after filing a complaint
with the Commission, may file a civil suit for injunctive relief if
the Commission fails to cause one to be filed. They also dispute
whether the exhaustion requirement applies to a suit for damages.
Compare 120 Cong.Rec. 35134 (1974) (remarks of Mr. Hays)
(suggesting that the statutory remedies are exclusive)
with
id. at 35132 (remarks of Mr. Brademas) ("individuals or
organizations who may have complaints about possible violations
[must]
first exhaust their administrative remedies with
the Commission . . ." (emphasis supplied));
see also
H.R.Conf.Rep. No. 93-1438, p. 94 (1974). However, these issues are
not here relevant; it suffices for the purposes of this case to
hold that the statute requires that a private complainant desiring
injunctive relief against alleged future violations of § 610 must
at least exhaust his statutory remedy under the Amendments when and
if such violations occur. We note that the question of the
availability of a private cause of action by respondent for
injunctive relief may not arise at all if the Attorney General
seeks and obtains injunctive relief for any claimed violations by
Bethlehem.
Cf. Richardson v. Wright, 405 U.
S. 208,
405 U. S. 209
(1972).
[
Footnote 10]
Although the considerations upon which we base our present
decision have relevance to a similar determination under the
Amendments, we imply no view whether the same result would obtain
under the Amendments.
See n 9,
supra, and
n 14,
infra.
[
Footnote 11]
In
Wyandotte, it was conceded that the United States
had a civil
in rem action against the ship obstructing
navigation under § 19 of the Rivers and Harbors Act of 1899, and
could retain the proceeds of the sale of the vessel and its cargo.
389 U.S. at
389 U. S. 200
n. 12. The only question was whether it also had other judicial
remedies for violation of § 15 of the Act, aside from the criminal
penalties provided in § 16.
In
Borak, § 27 of the Securities Exchange Act of 1934
specifically granted jurisdiction to the district courts over civil
actions to "enforce any liability or duty created by this title or
the rules and regulations thereunder," and there seemed to be no
dispute over the fact that at least a private suit for declaratory
relief was authorized; the question was whether a derivative suit
for rescission and damages was also available. 377 U.S. at
377 U. S.
340-431. Further, it was clear that the Securities and
Exchange Commission could sue to enjoin violations of § 14(a) of
the Act, the section involved in
Borak. See § 21
of the Act, 15 U.S.C. § 78u.
Finally, in
Rigsby, the Court noted that the statutes
involved included language pertinent only to a private right of
action for damages, although such a right of action was not
expressly provided, thus rendering "[t]he inference of a private
right of action . . . irresistible." 241 U.S. at
241 U. S. 40.
See also United States v. Republic Steel Corp.,
362 U. S. 482,
362 U. S. 491
(1960).
[
Footnote 12]
The Act provided:
"[It] shall be unlawful for any national bank, or any
corporation organized by authority of any laws of Congress, to make
a money contribution in connection with any election to any
political office. It shall also be unlawful for any corporation
whatever to make a money contribution in connection with any
election at which Presidential and Vice-Presidential electors or a
Representative in Congress is to be voted for or any election by
any State legislature of a United States Senator. . . ."
34 Stat. 864.
[
Footnote 13]
Section 610 was later expanded to include labor unions within
its prohibition. The history of this expansion has been recounted
before.
United States v. CIO, 335 U.
S. 106,
335 U. S.
114-116 (1948);
United States v. Auto Workers,
352 U. S. 567,
352 U. S.
578-584 (1957);
Pipefitters v. United States,
407 U. S. 385,
407 U. S.
402-409 (1972). We note that Congress did show concern,
in permanently expanding § 610 to unions, for protecting union
members from use of their funds for political purposes.
See
United States v. CIO, supra at
335 U. S. 135,
335 U. S. 142
(Rutledge, J., concurring). This difference in emphasis may reflect
a recognition that, while a stockholder acquires his stock
voluntarily and is free to dispose of it, union membership and the
payment of union dues is often involuntary, because of union
security and check-off provisions.
Cf. Machinists v.
Street, 367 U. S. 740
(1961). It is therefore arguable that the federal interest in the
relationship between members and their unions is much greater than
the parallel interest in the relationship between stockholders and
state-created corporations. In fact, the permanent expansion of §
610 to include labor unions was part of comprehensive labor
legislation, the Taft-Hartley Act of 1947, while the 1907 Act dealt
with corporations only with regard to their impact on federal
elections. We intimate no view whether our conclusion that § 610
did not give rise directly to a cause of action for damages in
favor of stockholders in state-created corporations necessarily
would imply that union members, despite the much stronger federal
interest in unions, are also relegated to state remedies.
[
Footnote 14]
Petitioners point out that the Federal Election Campaign Act of
1971 did create a private complaint procedure with regard to the
disclosure provisions there enacted, § 308(d), 86 Stat. 18, and
yet, while the Act, § 205, did amend § 610, it did not provide a
parallel remedy for private parties for violations of § 610.
Relying on
Amtrak, 414 U. S. 453
(1974), and
T.I.M.E., Inc. v. United States, 359 U.
S. 464 (1959), they ask us to infer from the fact that
some private remedy was provided with regard to Title III of the
1971 Act an intention to deny any such remedy with regard to the
criminal statutes amended in Title II.
We find this excursion into extrapolation of legislative intent
entirely unilluminating. In
Amtrak, there was a private
cause of action provided in favor of certain plaintiffs concerning
the particular provision at issue. It was in this context that we
referred to
"[a] frequently stated principle of statutory construction . . .
that, when legislation expressly provides a particular remedy or
remedies, courts should not expand the coverage of the statute to
subsume other remedies."
414 U.S. at
414 U. S. 458.
In addition, there was specific support in the legislative history
of the Amtrak Act for the proposition that the statutory remedies
were to be exclusive.
Id. at
414 U. S.
458-461.
In
T.I.M.E., supra, the Court did rely in part upon the
fact that a particular remedy was provided with regard to certain
parts of the Interstate Commerce Act to infer that none was
intended with regard to others. But again, there was specific
support in the legislative history for this inference. 359 U.S. at
359 U. S.
471-472, 477, and n. 18.
Here, there was, as far as the parties have been able to point
out and as far as we have been able independently to determine, no
discussion whatever in Congress concerning private enforcement of §
610. Further, while § 610 was amended in ways not pertinent here in
1971, it was, as we have seen, of much earlier origin, and it would
be odd to infer from Congress' actions concerning the newly created
provisions of Title III any intention regarding the enforcement of
a long-existing statute.
Petitioners also suggest that the legislative history of the
Amendments throw a "cross-light,"
Pipefitters v. United
States, 407 U.S. at
407 U. S. 427,
upon Congress' understanding concerning private enforcement of §
610. Any such light cast is, in our view, exceedingly dim, and of
little help here.