Cort v. Ash

Last updated

Cort v. Ash
Seal of the United States Supreme Court.svg
Argued March 18, 1975
Decided June 17, 1975
Full case nameCort, et al. v. Ash
Citations422 U.S. 66 ( more )
95 S. Ct. 2080; 45 L. Ed. 2d 26; 1975 U.S. LEXIS 143
Case history
PriorOn writ of certiorari from the United States Court of Appeals for the Third Circuit
Holding
18 U.S.C. § 610 does not create a private cause of action.
Court membership
Chief Justice
Warren E. Burger
Associate Justices
William O. Douglas  · William J. Brennan Jr.
Potter Stewart  · Byron White
Thurgood Marshall  · Harry Blackmun
Lewis F. Powell Jr.  · William Rehnquist
Case opinion
MajorityBrennan, joined by unanimous
Laws applied
18 U.S.C.   § 610

Cort v. Ash, 422 U.S. 66 (1975), was a case in which Justice William J. Brennan writing for a unanimous United States Supreme Court articulated a four factor test for federal courts to apply when deciding whether the implication doctrine allows a cause of action to be inferred from a federal statute that does not clearly state a civil remedy. [1]

Contents

The Cort criteria were applied by some lower federal courts as a restrictive standard to test applications of the implication doctrine, including a 7th Circuit decision, later reversed by the Supreme Court, which held no private right of action exists under Title IX to challenge a denial of admission to medical school as gender-based discrimination. [2]

Background

Defendant/petitioner Stewart S. Cort, chairman of the board of directors of Bethlehem Steel Corporation, published a series of political advertisements in nineteen local newspapers where the company had plants, as well as several national publications (including Time, Newsweek, and U.S. News & World Report). The advertisements were in support of the business community, asserting that an allegation (supposedly made by 1972 Presidential candidate George McGovern) that big business was not paying its fair share of taxes was untrue, and suggesting that people mobilize “truth squads” to spread this idea. The funding for these ads came from Bethlehem's general corporate funds.

The plaintiff/respondent was a shareholder of Bethlehem, and a qualified voter. He sued in the United States District Court for the Eastern District of Pennsylvania, on behalf of both himself and the corporation (a derivative suit). He sued under both 18 U.S.C.   § 610 (a criminal statute forbidding corporations from making contributions or expenditures in connection with Presidential elections repealed by the 1976 amendments to the Federal Election Campaign Act), [3] and the corporate law of the state of Delaware. He then amended his complaint to drop the state law claim, after he declined to post $35,000 in security for expenses in order to proceed with the claim.

The District Court held that the criminal penalties of the federal statute did not include any private cause of action, and granted summary judgment for the defendant. The plaintiff appealed. The United States Court of Appeals for the Third Circuit reversed, holding 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 a violation of §610". [4]

Question

Could the court properly assume a private cause of action for damages against corporate directors under 18 U.S.C. § 610?

Decision

William J. Brennan wrote for a unanimous Court. He found that because § 610 was a criminal statute, and because at the time suit was filed, there was no provision for civil enforcement of the statute, there was no need to imply a private cause of action.

Furthermore, a statute enacted in 1974 amended the Federal Election Campaign Act to create the Federal Election Commission, which was granted primary jurisdiction over such complaints. Because of this intervening law, the Court chose to apply the law which was in effect at the time the case was commenced. It comes from United States v. Schooner Peggy (1801) [5] and was reaffirmed in Bradley v. Richmond School Board (1974). [6]

Brennan also laid out four factors for determining when a cause of action should be implied from a statute:

  1. Is the plaintiff within the class for whose benefit the statute was enacted (i.e., does the statute create a federal right in the plaintiff's favor)?
  2. Is there any indication of legislative intent, explicit or implicit, either to create or deny a cause of action?
  3. Is it consistent with the underlying purposes of legislative scheme to imply such a remedy for the plaintiff?
  4. Is the cause of action one traditionally relegated to state law, in an area specifically of concern to the states, so that it would be inappropriate to infer a cause of action based solely on federal law?

422 U.S. at 78.

Here, the Court found that there was no legislative indication that private cause of action was intended by Congress, or that the plaintiffs in this action were within the class sought to be benefited by the statute. Brennan commented that the intent to protect corporate shareholders “was at best a subsidiary purpose” of the statute. 422 U.S. at 80. He also found that implying a cause of action was inconsistent with the statute's purpose, and that the plaintiff had a remedy under state corporate law. Thus, the Third Circuit's decision was overturned.

See also

Related Research Articles

In law, standing or locus standi is a condition that a party seeking a legal remedy must show they have, by demonstrating to the court, sufficient connection to and harm from the law or action challenged to support that party's participation in the case. A party has standing in the following situations:

<span class="mw-page-title-main">Mootness</span> Legal term on the status of a matter

The terms moot, mootness and moot point are used in both in English and American law, although with different meanings.

<span class="mw-page-title-main">Alien Tort Statute</span> US legislation

The Alien Tort Statute, also called the Alien Tort Claims Act (ATCA), is a section in the United States Code that gives federal courts jurisdiction over lawsuits filed by foreign nationals for torts committed in violation of international law. It was first introduced by the Judiciary Act of 1789 and is one of the oldest federal laws still in effect in the U.S.

<i>Rooker–Feldman</i> doctrine American legal doctrine

The Rooker–Feldman doctrine is a doctrine of civil procedure enunciated by the United States Supreme Court in two cases, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). The doctrine holds that lower United States federal courts—i.e., federal courts other than the Supreme Court—should not sit in direct review of state court decisions unless Congress has specifically authorized such relief. In short, federal courts below the Supreme Court must not become a court of appeals for state court decisions. The state court appellant has to find a state court remedy, or obtain relief from the U.S. Supreme Court.

Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), was a case in which the US Supreme Court ruled that an implied cause of action existed for an individual whose Fourth Amendment protection against unreasonable search and seizures had been violated by the Federal Bureau of Narcotics. The victim of such a deprivation could sue for the violation of the Fourth Amendment itself despite the lack of any federal statute authorizing such a suit. The existence of a remedy for the violation was implied by the importance of the right violated.

Cannon v. University of Chicago, 441 U.S. 677 (1979), was a United States Supreme Court case which interpreted Congressional silence in the face of earlier interpretations of similar laws to determine that Title IX of the Higher Education Act provides an implied cause of action.

A cause of action or right of action, in law, is a set of facts sufficient to justify suing to obtain money or property, or to justify the enforcement of a legal right against another party. The term also refers to the legal theory upon which a plaintiff brings suit. The legal document which carries a claim is often called a 'statement of claim' in English law, or a 'complaint' in U.S. federal practice and in many U.S. states. It can be any communication notifying the party to whom it is addressed of an alleged fault which resulted in damages, often expressed in amount of money the receiving party should pay/reimburse.

Northern Pipeline Construction Company v. Marathon Pipe Line Company, 458 U.S. 50 (1982), is a United States Supreme Court case in which the Court held that Article III jurisdiction could not be conferred on non-Article III courts.

<span class="mw-page-title-main">2005 term per curiam opinions of the Supreme Court of the United States</span>

The Supreme Court of the United States handed down sixteen per curiam opinions during its 2005 term, which lasted from October 3, 2005, until October 1, 2006.

Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525 (1958), decided on May 19, 1958, was a decision by the Supreme Court of the United States that refined the doctrine regarding in what instances courts were required to follow state law.

Feres v. United States, 340 U.S. 135 (1950), combined three pending federal cases for a hearing in certiorari in which the Supreme Court of the United States held that the United States is not liable under the Federal Tort Claims Act for injuries to members of the armed forces sustained while on active duty and not on furlough and resulting from the negligence of others in the armed forces. The opinion is an extension of the English common-law concept of sovereign immunity.

Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), was a United States Supreme Court decision involving the original jurisdiction of the federal district courts under 28 U.S.C. § 1331.

Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), was a United States Supreme Court case in which the Court limited the scope of the Texas Healthcare Liability Act (THCLA). The effective result of this decision was that the THCLA, which held Case Management and Utilization Review decisions by Managed Care entities like CIGNA and Aetna to a legal duty of care according to the laws of The State of Texas could not be enforced in the case of Health Benefit plans provided through private employers, because the Texas statute allowed compensatory or punitive damages to redress losses or deter future transgressions, which were not available under ERISA § 1132. The ruling still allows the State of Texas to enforce the THCLA in the case of Government-sponsored (Medicare, Medicaid, Federal, State, Municipal Employee, etc., Church-sponsored, or Individual Health Plan Policies, which are saved from preemption by ERISA. The history that allows these Private and Self-Pay Insurance to be saved dates to the "Interstate Commerce" power that was given the federal Government by the Supreme Court. ERISA, enacted in 1974, relied on the "Interstate Commerce" rule to allow federal jurisdiction over private employers, based on the need of private employers to follow a single set of paperwork and rules for pensions and other employee benefit plans where employers had employees in multiple states. Except for private employer plans, insurance can be regulated by the individual states, and Managed Care entities making medical decisions can be held accountable for those decisions if negligence is involved, as allowed by the Texas Healthcare Liability Act.

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), was a United States Supreme Court case involving the Alien Tort Statute and the Federal Tort Claims Act. Many ATS claims were filed after the Second Circuit ruling in Filártiga v. Peña-Irala created a new common law cause of action for torture under the ATS: “For purposes of civil liability, the torturer has become—like the pirate and slave trader before him—hostis humani generis, an enemy of all mankind.” The Court in Sosa does not find there is a similar cause of action for arbitrary arrest and detention. They wrote that finding new common law causes of action based on international norms would require "a substantial element of discretionary judgment", and explain that the role of common law has changed since ATS was enacted meaning the Court will "look for legislative guidance before exercising innovative authority over substantive law".

Paul v. Davis, 424 U.S. 693 (1976), is a United States Supreme Court case in which a sharply divided Court held that the plaintiff, whom the local police chief had named an "active shoplifter," suffered no deprivation of liberty resulting from injury to his reputation. In the case, the court broke from precedents and restricted the definition of the constitutional right to privacy "to matters relating to 'marriage procreation, contraception, family relationships, and child rearing and education".

Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936), was a United States Supreme Court case that provided the first elaboration of the doctrine of "Constitutional avoidance".

American Electric Power Company v. Connecticut, 564 U.S. 410 (2011), was a United States Supreme Court case in which the Court, in an 8–0 decision, held that corporations cannot be sued for greenhouse gas emissions (GHGs) under federal common law, primarily because the Clean Air Act (CAA) delegates the management of carbon dioxide and other GHG emissions to the Environmental Protection Agency (EPA). Brought to court in July 2004 in the Southern District of New York, this was the first global warming case based on a public nuisance claim.

Patchak v. Zinke, 583 U.S. ___ (2018), is a United States Supreme Court case in which the Court upheld the Gun Lake Trust Land Reaffirmation Act, which precludes federal courts from hearing lawsuits involving a particular parcel of land. Although six Justices agreed that the Gun Lake Act was constitutional, they could not agree on why. In an opinion issued by Justice Thomas, a plurality of the Court read the statute to strip federal courts of jurisdiction over cases involving the property and held that this did not violate Article Three of the United States Constitution. In contrast, Justices Ginsburg and Sotomayor, both of whom concurred in the judgment, upheld the Act as a restoration of the government's sovereign immunity. Chief Justice Roberts, writing for himself and Justices Kennedy and Gorsuch, dissented on the ground that the statute intruded on the judicial power, in violation of Article III.

Babb v. Wilkie, 589 U.S. ___ (2020), is a case of the United States Supreme Court in which the justices considered the scope of protections for federal employees in the Age Discrimination in Employment Act of 1967. Specifically, the Court ruled that plaintiffs only need to prove that age was a motivating factor in the decision in order to sue. However, establishing but for causation is still necessary in determining the appropriate remedy. If a plaintiff can establish that the age was the determining factor in the employment outcome, they may be entitled to compensatory damages or other relief relating to the result of the employment decision.

Boyle v. United Technologies Corporation, 487 U.S. 500 (1988), is a United States Supreme Court case in which the Court held that government contractors are immune from liability for design defects in military equipment.

References

  1. "Notes - Implied Rights of Action to Enforce Civil Rights" (PDF). Yale Law School Legal Scholarship Repository.
  2. 441 U.S. 677 (1979)
  3. Pub. L. 94–283, title II, § 201(a), May 11, 1976, 90 Stat. 496
  4. 496 F. 2d 416 at 424 (1974)
  5. "It is in the general true that the province of an appellate court is only to enquire whether a judgment when rendered was erroneous or note. 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."
  6. "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 manifest injustice or there is statutory direction or legislative history to the contrary."