Appendix — Cort v. Ash

Supreme Court brief1975

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TABLE OF CONTENTS OF APPENDIX.

Page

Docket Entries in the United States District Court for the

Eastern District of Pennsylvania ...............5000085 Al

CIE ono 550 5 5 5:ere 650 5 69540 5094624 se eweckseeens A8&

Exhibit “A” ........... Guu un va eeainasa sseyveau vanes ~ Al6

Plaintiff's Motion for Temporary Restraining Order ......... Al7

Order of the United States District Court for the Eastern Dis- —

trict of Pennsylvania dated October 13, 1972 ........... Al9

Answer of Defendants .............ccccccccccccncceccees A20

Plaintiff's Motion for Preliminary Injunction ............... A26

Stipulation of Agreed Upon Facts ........... 2.0... ee eee A28

Ee WA” 6 cisaeesssnnss Lit venceennsdsaennxane eet A3l

MG Me x riaenins 645s on bn nse 4eKGe sd sw ee seemens A32

ee | MTT OTE Cee ee Tee Te Ter reer A42

Plaintiff's Amended Motion for Preliminary Injunction ...... A45

Findings of Fact, Conclusions of Law and Order of United

States District Court for the Eastern District of Pennsyl- :

vania dated October 25, 1972 ........ cc cee ee cee ceeees A46

eo de, ee ne re rere A57

ee ee? See re eee ey rr ee AS9 ~

Decision of United States Court of Appeals for the Third Cir-

cult Sled Jomuary 5, 1973.0. ccc ceescccccsccccecaneces A60

Judgment of the United States Court of Appeals for the Third

Circuit dated January 5, 1973 ........ 2... ccc eee eee eee A63

Defendants’ Motion for Security for Expenses ............. A65

Order of the United States Court of Appeals for the Third Cir-

cuit dated January 31, 1973 ..... eee ee A67

Order of the United States District Court for the Eastern Dis-

trict of Pennsylvania dated March 7, 1973 ............. A68

First Amended Complaint ........... 0.0... cece cece eee eee A69

A77

TABLE OF CONTENTS OF APPENDIX (Continued).

Page

Index to Memorandum of Law in Support of Defendants’

Motion for Summary Judgment ...................... A80

Plaintiff's Motion for an Evidentiary Hearing on the Question

of Plaintiff's Standing and for Continuation of Defendants’

Motion for Summary Judgment ....................-. A82

Plaintiff's A@idavit in Support of Motion for an Evidentiary

SUE Ss 95 4441904450046 4404 5410 0R se eee En ke se A&4

PR FE. ens oe es adie ewsiscodeeneeeeesiinwesesses A86

Order of the United States District Court for the Eastern Dis-

trict of Pennsylvania dated July 11, 1973 .............. A87

Netigs of Appeal ......ccccccsvcvcccccccccccnccccecs eee A88

Appellant’s Designation of Parts of Record to be Included in

Appendix and Statement of Issues to be Presented for

BOND hi nnnha04G0n ehh asia bony edanddencesarcavees A89

Decision of United States Court of Appeals for the Third Cir-

cuit filed April 16, 1974 ............. ccc cece cece eee A92

Judgment of the United States Court of Appeals for the Third

Circuit dated April 16, 1974 ....................0000- All6

Order of the United States Court of Appeals for the Third Cir-

a ee ee Ail8

Motion of Appellees for Stay of Manfiate Pending Applicaticn

for Writ of Certiorari ........ 4h... 0... cece eee eee A120

‘Order of the United States Court : Appeals for the Third

Circuit dated May 22, 1974 ......... 0.2... eee eee A123

Order of the United States Court of Appeals for the. Third

Circuit dated July 10, 1974 ......... cece eee ee eee Ai24

Letter from Clerk, Supreme Court of the United States, dated

November 11, 1974 ........... 0.00... cee cuee aeaeaes A125

DOCKET ENTRIES.

1 Sept. 28, 1972. Complaint filed.

Sept. 28, 1972. Summons Exit.

Sept. 28, 19/2. Jury Triuat DemManpDeD.

2 Sept. 28, 1972. Order appointing Jeffrey A. Cokin to

make service upon the defts’ in this action, filed.

9/29/72 entered and copies mailed.

3 Sept. 29, 1972. ‘Service accepted by G. L. Franken-

field on bekalf of Bethlehem Steel Corp., filed.

4 Oct. 5, 1972. Notice of deft Bethlehem Steel Corp. of

taking deposition of Plff Richard Ash, filed.

5 Oct. 6, 1972. Appearance of Blank, Rome, Klaus &

Comisky, Esqs. for defts’ Stewart S. Cort, Lewis

W. Foy, Edward D. Bickford, Bernard D.

Broeker, Albert M. Reed, C. Thompson Stott,

and Ivor D. Sims, filed.

6 Oct. 6, 1972. Appearance of Blank, Rome, Klaus &

Comisky, Esqs. For Bethlehem Steel Corp., filed.

7 Oct. 11, 1972. Summons returned with affidavit of

Jeffrey Cokin thereof, filed.

8 Oct. 13, 1972. PIff’s Motion for Temporary Restrain-

ing Order, Memorandum in Support and Order

that Motion is Denmp, filed. 10/16/72 entered

and copies mailed.

9 Oct. 18, 1972. Appearance of Blank, Rome, Klaus &

Comisky, Esqs. for defts’ Crowdus Baker, Jess

H. Davis, Thomas S. Gates, Robert B. Hobbs

and George P. Jenkins, filed.

(Al)

Oct.

Cet.

Oct.

Docket Entries

18, 1972. Answer, of all defts, filed.

Case LisTep ror TRIAL.

24, 1972. Defts’ Proposed Findings of Fact and

Conclusions of Law, filed.

26, 1972. Letter dated 10/16/72 to Judge Trout-

man from Cletus Lyman, Esq. Re: Counsel to

prepare Amended Motion and Order as well as a

supplemental breif, filed (As of 10/20/72).

26, 1972. Plff’s Motion for Preliminary Injunc-

tion, Memorandum cf Law in Support and

Notice thereof filed as of 10/20/72, filed.

26, 1972. Plff’s Amended Motion for Preliminary

Injunction and Memorandum in Support thereof

filed as of 10/20/72, filed.

26, 1972. Defts’ Memorandum in Opposition to

Plff’s Motion for Preliminary Injunction, filed.

26, 1972. Stipulation of Agreed Upon Facts of

Plff and defts’, filed as of 10/20/72, filed.

26, 1972. Letter dated 10/23/72 to Judge Trout-

man from Cletus Lyman, Esq. Re: Change of

phrases in proposed draft of preliminary injunc-

tion, filed.

27, 1972. Findings of Fact, Conclusions of Law

Troutman, J. and Order that plff’s motion for

Preliminary Injunction is Denrp, filed. 10/30/72

entered and Notices mailed.

Nov. 1, 1972. Plff’s Notice of Appeal, filed.

Nov. 1, 1972. Copy of Clerk’s Notice to U. S. Court

of Appeals, filed. .

Nov.

Jan.

Feb.

Docket Entries A3

2, 1972. Record Transmitted to U. S. Court of

Appeals (U.S. C. A. 72-1984).

3, 1973. Transcript of 10/20/72, filed.

15, 1973. Defts’ Motion for Security for Ex-

penses and Notice thereof, filed.

15, 1973. Defts’ Memorandum in support of

Motion for Security for Expenses, filed.

7, 1973. PIlff’s interrogatories to Nominal deft,

Bethlehem Steel Corp., filed.

7, 1973. PIff’s Request to Nominal Deft, Bethle-

hem Steel Corp. for Production of Documents,

No. 1, filed.

9, 1973. Plff’s Preliminary Memorandum in Op-

position to defts’ Motion for Expenses, filed.

9, 1973. Certified copy of Judgment in lieu of

formal mandate received from U.S. C. A. that

the judgment of the District Court entered

10/27/72 is Affirmed, filed. 2/9/73 entered and

copy to J. Troutman.

9, 1973. Record on Appeal Returned.

9, 1973. Withdrawal of Affidavit of Cletus P.

Lyman and Submission of Affidavit of Richard

A. Ash, filed.

13, 1973. Defts’ Objections to Plff’s interroga-

tories, filed.

13, 1973. Defts’ Objections to Plff’s Request for

Production of Documents, No. 1, filed.

A4 Docket Entries

31 Mar. 7, 1973. Order that defts’ motion for security

| for expenses as it relates to Count 1 of plff’s

complaint is Dénied; that plff post a Bond in the

Amount of $35,000 as security for expenses and

such bond to be posted within (10) days of the

date of this Order; plff’s preliminary memoran-

dum as a Motion for leave to Amend the com-

‘plaint is Grantep and that defts’ objections to

plff’s interrogatories and request for documents

as they relate to this Motion are sustained, filed.

3/7/73 entered and copies mailed.

32 Mar. 13, 1973. PIff’s Motion to Compel Answers to

Interrogatories, Memorandum in Support and

Notice thereof, filed.

33 Mar. 19, 1973. Plff’s notice of taking deposition of

deft, Stewart S. Cort, filed.

. 19, 1973. First Amended Complaint, filed.

. 29, 1973. Defts’ Motion for Summary Judg-

ment, Certificate of Service and Notice thereof,

filed.

36 Mar. 29, 1973. Memorandum of Law in Support of

defts’ Motion for Summary Judgment, filed.

37 Mar. 30, 1973. Defts’ Motion for a Protective Order,

Certificate of Service and Notice thereof, filed.

38 Mar. 30, 1973. Defts’ Memorandum of Law in sup- -

port of Motion for Protective Order, filed. _/)

39 Apr. 10, 1973. PIff’s praecipe for entry of default on

first amended complaint and affidavit in support

thereof, filed.

Apr. 10, 1973. Defts’ defaulted for failure to plea,

filed. |

e &

= =

Docket Entries A5

May 4, 1973. Defts’ Motion to set aside Entry of ©

Default and for Sanctions and Notice thereof,

filed. (Answer To AMENDED CompLaint Ar-

TACHED).

May 4, 1973. Defts’ Memorandum in support of

Motion to set aside Entry of Default and for

Sanctions, filed.

Jun. 4, 1973. Anrcuep Sur: Deft’s Motion to set aside

default.

Jun. 5, 1973. Order that defts’ motion to set aside

entry of default is Grantep, defts’ motion for

sanctions is Denrep and that PIff respon to

defts’ motion for summary Judgment witain

(10) days from the date of this Order, filed.

6/6/73 entered and copies mailed.

Jun. 15, 1973. PIff’s Memorandum in. opposition to

defts’ Motion for summary judgment anu Ex-

hibits in support thereof, filed.

Jun. 21, 1973. Defts’ Reply Memorandum in support

of Motion for Summary Judgment, filed.

Jun. 22, 1973. Transcript of 6/4/73, filed.

_July 3, 1973. Defts’ Memorandum of Law in opposi-

tion to plff’s Motion for an Evidentiary Hear-

ing and for continuation of defts’ Motion for

‘Summary Judgment, filed.

July 9, 1973. PIlff’s Motion for an Evidentiary Hear-

ing on the Question of Plff’s standing and for

Continuation-of defts’ Motion for Summary

Judgment, Memorandum of Law in Support and

Notice thereof, filed.

nie Nee PS Nhl ELMS nil st DATE Meng CE

A6 Docket Entries

48 July 9, 1973. Affidavit of Richard A. Ash, Esq. in

Support of Motion for an evidentiary hearing

etc., filed.

49 July 11, 1973. Order that Plff’s motion for an evi-

dentiary hearing and for continuation of defts’

motion for summary judgment is Deniep and

that defts’ motion for summary judgment is

GrantepD, filed. 7/12/73 entered and copies

mailed.

50 July 18, 1973. Plff’s Notice of Appeal, filed. © +. &

51 July 18, 1973. Copy of Clerk’s Notice to U. S. Court

of Appeals, filed.

Aug. 7, 1973. ‘Recorp Transmitrep To U. S. C. A.

(U.S. C. A. #73-1739).

Oct. 4, 1973. Bond for Costs on Appeal in the sum of

$250.00 with Fidelity and Deposit Co. of Mary-

land, filed.

52 Oct. 31, 1973. Certified copy of Order received from

U. S. C. A. Denyine Appellees’ motion to Dis-

miss appeal on the ground that Appellant has

failed to file a bond for costs on appeal, filed.

11/1/73 entered and copy mailed to Judge Trout-

man.

53 Jun. 13, 1974. Defts’ Memorandum of Law in Oppo-

sition to Plff’s Motion for leave to take deposi-

tions and to Request Production of Documents,

filed.

54 Jun. 14, 1974. Plff’s Motion for leave to take deposi-

tions and to request production of Documents,

Memorandum in Support and Notice thereof,

filed.

a eR:

TOS RASS Rg PGE Ty

Docket Entries AZ

Jun. 27, 1974. Order that plff’s motion for leave to

take depositions and to request production of

documents pending “ppeal is Dernzep, filed.

6/28/74 entered and copies mailed.

July 11, 1974. Notice or Apprat or Purr, Fen.

July 11, 1974. Copy of Clerk’s Notice to U. S. Court

of Appeals, filed.

July 16, 1974. First SuppLementaL Recorp Trans-

MITTED To U. S. Court or APPEALS.

Sep. 6, 1974. plff’s. bond for costs,on appeal, in the

; amount of $250.00, and with Fidelity and Deposit

Co: of Maryland as surety, filed.

Nov. 14, 1974. Certified copy of Orprer, from the U. S.

C. A., that def.-appellee’s motion to dismiss the

appeal for lack of jurisdiction is referred to the

panel before which this appeal is listed for dis-

position; Appellee is granted 10 days within

which to file its answering brief, filed.

AS Complaint

IN THE

UNITED STATES DISTRICT COURT

For tue Eastern District or PENNSYLVANTA.

Crvit Action No. 72-1925.

Jury TriAL DEMANDED.

RICHARD A. ASH

Pxiaza APARTMENT

18tH & BengamMiIn FRANKLIN ParKWAY

PuiLapELtpHia, Pa. 19104

On Bexar or HIMsELrF,

AND oN BEHALF OF

BETHLEHEM STEEL CORPORATION

701 East Tutrp Street

BETHLEHEM, PENNsytvania 18016

~ Plaintiff,

STEWART S. CORT, CyHatrman

LEWIS W. FOY, Preswent

EDWARD D. BICKFORD, Vice Presinent

BERNARD D. BROEKER, Vice Presment

ALBERT M. REED, Vice Presipent

C. THOMPSON STOTT, Vice Presivent

TVOR D. SIMS, Vice Presment

CROWDUS BAKER

JESS H. DAVIS

Complaint A9

THOMAS 'S. GATES

ROBERT B. HOBBS

GEORGE P. JENKINS,

AuuL Beine Directors oF

BETHLEHEM STEEL CORPORATION

Defendants

AND

BETHLEHEM STEEL CORPORATION

701 East Tuirp STREET

BETHLEHEM, PENNSYLVANIA 18016,

Nominal Defendant.

COMPLAINT.

1. Plaintiff Richard Ash is an individual residing at

the Plaza Apartment, 18th & Benjamin Franklin Parkway,

Philadelphia, Pennsylvania.

2. Nominal defendant, Bethlehem Steel Corporation

_ (Bethlehem Steel) is a Delaware Corporation with prin-

cipal office located at 701 East Third Street, Bethlehem,

Pennsylvania, engaged, inter alia, in the business of steel

production, distribution and sale.

3. Bethlehem Steel is the second largest United States

steel producer with.annual gross sales in excess of $3.5

billion annually. It maintains plants and offices for the

carrying out of its business throughout the United States,

including the Eastern District of Pennsylvania.

4. Defendants Stewart S. Cort, Lewis W. Foy, Edward

D. Bickford, Bernard D. Broecker, Albert M. Reed, Ivor D.

Sims, C. Thompson Stott, Crowdus Baker, Jess H. Davis,

Thomas S. Gates, Robert B. Hobbs and George P. Jenkins,

are individuals residing within the United States, who com-

= SS TABS a

sa es hic Sax i an CON i Oi i

vain leahs | uh at ins Sulla

A10 Complaint

prise the Board of Directors of Bethlehem Steel, Cort being

the Chairman of said Board. Foy, Bickford, Broeker, Reed,

Sims and Stott serve additionally as top echelon executives

of said company; Foy as its President; and the others as

Executive Vice Presidents.

5. By virtue of their said positions with Bethlehem

Steel, defendants control the policy making of the corpora-

tion, its implementation of such policies, and the disburse-

ment of corporate funds pursuant to and in furtherance of

such policies.

6. Bethlehem Steel is a publicly held corporation whose

stock is traded and listed on the New York Stock Exchange.

Its stock is widely distributed to in excess of 200,000

holders, a substantial number of whom live within the

United States and within the Eastern District of Penn-

sylvania.

7. Plaintiff is, and was at all times herein material, the

owner of 50 shares of Bethlehem Steel stock. He is, in ad-

dition, a citizen of the United States, registered and quali-

fied to vote in the 1972 United States presidential election.

8. Plaintiff brings this action in an individual capacity

as a shareholder, a United States citizen and a qualified

voter in the said presidential election, and derivatively on

behalf of Bethlehem Steel Corporation, and alleges that

he is well able to fairly, ably and effectively represent the

rights and interests of said corporation.

9. No demand has been made upon the Directors of

- Bethlehem Steel to seek similar redress directly, because

said Directors are involved in and responsible for the

wrongdoing out of which plaintiff’s suit arises.

10. No request for concerted action has been made to

plaintiff’s fellow shareholders in Bethlehem Steel, because

SRS as PONS ae ee Poe

Complaint All

they are too numerous and too widely scattered to make

such request practicable.

11. This action is not a collusive one to confer juris-

diction upon a court of the United States which it would

not otherwise have.

Count I.

12. This count arises out of alleged violation by de-

fendants of the criminal statutes of the United States gov-

erning elections and political activities, commonly known

as the Federal Corrupt Practices Act, specifically Title 18,

Section 610, U. S. C. A. of said Act, and the private remedy

for redress of grievances implied under said Act. Juris-

diction is invoked under Title 28, Section 1331, U. 8S. C. A.,

the amount in controversy exceeding the sum of $10,000,

exclusive of interest and costs.

13. At some time in 1971 or 1972, defendants. entered

into a plan involving the utilization of Bethlehem Steel’s

resources, including the expenditure of its funds, in con-

nection with the 1972 United States presidential election.

14. The ultimate purpose of said plan was to influence

the United States electorate to help bring about a Republi-

can Party victory in said election. This purpose was

solely in furtherance of the individual interests and beliefs

of defendants and was in violation of state and federal law,

and in derogation of the rights of the United States public,

and of the approximate one half of the shareholders of

Bethlehem Steel that are registered members of the Demo-

cratic political party.

15. Thereafter, in furtherance of said plan and pur-

pose, defendants caused, and continue to cause, corporate

resources to be utilized, including the expenditure of sub- |

stantial funds in connection with said political campaign,

A12 Complaint

including, inter alia, their causing to be prepared and dis-

seminated at corporate expense, an advertisement entitled

“T Say Ler’s Keep THE Campaign Ucnest. Mosi.ize

‘TrutH Squads’. . .’’, attributed to defendant Cort. (A

copy of said advertisement is attached hereto and made

part hereof as Exhibit ‘‘A’’.)

16. Said advertisement has been and is being communi-

cated to the United States’ electorate as aforesaid, inter

alia, by insertion in various magazines of national circu-

lation, including Newsweek, Time, U. S. News & Wor.p

Report, Bustness WEEK, Satugpay Review, Inpustry

Week, Forses, Harvarp Business Review, Epiror & Pvus-

LISHER, and in various local newspapers, and by a direct

mailing, to Bethlehem Steél shareholders.

17. The aforesaid actions by defendants have been

and are in violation of said Federal Election law, which:

states in its here material part that:

‘Tt is unlawful for . . . any corporation whatever

. to make a contribution or expenditure in con-

nection with any election at which Presidential and

Vice Presidential electors or a Senator or Representa-

: tive in, or a Delegate or Resident Commissioner to

Congress are to be voted for... .’’ Title 18, Sec.

610, U. S. C. A.

18. The said actions by defendants are, a fortiori,

unlawful in that they involve the utilization of corporate

resources for partisan political purposes in connection with -

said presidential election, pursuant to defendants’ plan

and purposes.

19. The said advertisement is blatantly partisan on

its face, in that it in essence calls for the mobilization of

‘*truth squads’’ to keep the campaign honest, on the basis

of the following factors extracted -herefrom:

ETD OER LORE IID HES HS TF gt Ret My

ad ety

Complaint Al3

‘‘Why do I see this need? Because several months

ago we lived through a number of political primary

campaigns. And it ought to be clear to all of us that

there have been times when truthfulness took an awful

beating. : And now we have a presidential campaign

ahead, during which we can clearly see a lot more of

the same.

‘‘T’m thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community.

* * *

‘‘As an example of the careless rhetoric and accusa-

tions about the business community, Mr. Cort 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.’ ’’ (Exhibit

“-"")

All of which factors can only reasonably be imputed to

activities of Democratic candidates and programs and poli-

cies that are identified by the public with the Democratic

party and its current candidate for the presidency.

20. Defendants have thus far caused an unlawful ex-

penditure by Bethlehem Steel in connection with the 1972

Presidential Election Campaign, as aforesaid, of corporate

funds and other resources with a total value in excess of

$500,000, which wrongful expenditure continues.

Count II.

21. This count arises under the common law and the

laws of the State of Delaware. Jurisdiction of this court

is invoked under the pendent jurisdiction of the federal

courts.

Al4 Complaint

22. Plaintiff incorporates herein by reference his aver-

ments in Paragraphs 1 through 20 inclusive.

23. Defendants’ said acts and expenditures of corpo-

rate resources in connection with the election campaign

are ultra vires, unlawful and constitute willful, wanton and

gross breach of their duty owed to said corporation.

Wuererore, plaintiff respectfully requests that this

Honorable Court enter:

(A) An Order temporarily and permanently restrain-

ing and enjoining defendants from any further expendi-

tures of corporate resources, directly or indirectly, in con-

nection with the 1972 Presidential Election Campaign, or

any future political campaign.

(B) An Order that defendants immediately place cor-

rective advertising at their own expense in national media

under the direction, and subject to the approval of, the

Court.

and in favor of plaintiff corporation in an amount in excess

of $500,000 compensatory damages.

(D) Judgment against defendants jointly and sever-

ally and in favor of plaintiff corporation for punitive dam-

ages commensurate with their wrongdoing.

(E) Judgment against defendants jointly and sever-

ally and in favor of plaintiff for costs of suit, including

reasonable attorneys’ fees.

(F) Such other further and different relief as appears

proper under the circumstances.

Cuietus P. Lyman, Esq.,

1612 Latimer Street,

Philadelphia, Pa. 19103

REEL PORTE PROM A STE OOD —

Complaint Ald

CoMMONWEALTH OF PENNSYLVANIA

S8.:

County OF PHILADELPHIA

Ricuarp A. As, being duly sworn according to law,

deposes and says that he is the plaintiff in the within com-

plaint and is familiar with the facts set forth therein which

are true and correct to the best of his knowledge, informa-

tion and belief.

/s/ RicHARD A. AsH.

Richard A. Ash.

Sworn to and subscribed to before me this 28 day

of Sept., 1972.

/s/ Nancy H. BERGMAN.

Nancy H. Bereman, Notary Public,

PHILADELPHIA, PHILADELPHIA CounTY,

My Commission Expires May 6, 1976,

Member, Pennsylvania Association of Notaries.

=_—

}

Exhibit "A"

Al6

| say lets keep

the campaign honest.

Mobilize truth squads...

Siewart S. Cort, Chairman.

Bethlehem Steel Corporation

“Why do I see this need? Because several months ago

we lived through a number of political primary cam-

paigns. And it ought to be clearcto-all of us that there

have been times when truthfulness took an awful beat-

ing. And now we have a presidential campaign ahead,

during which we can clearly see a lot more of the same.

“I'm thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community.

“Right now, look at every candidate’s declared political

programs. Analyze every issue. If you think any of

them are faulty, ill-founded, or misleading, prepare

your own answers and use those answers to set the

record straight. I’d suggest that groups with a deep

interest in good government organize programs to en-

courage responsible, honest, and truthful campaigning.

Mobilize “truth squads,” perhaps.

“One thing you can do is talk in advance with the

communications media in your area—newspaper pub-

lishers, editors, reporters, radio and television people,

and magazine publishers. Alert them to the kinds of

false statements that are likely to be made and show

them how and why those statements are false or de-

ceptive. Give them the facts. They're likely to take

a highly responsible position in reporting what the

politicians say if they’re forewarned.

“And when outrageous accusations are reported in the

media, you ought to refute them immediately. You can

do it if you’re properly prepared. Plan to attend politi-

cal functions and stand up when spokesmen are off

base. Concerned citizens ought to do this; it’s nothing

more than true democracy in action.”

From a talk “SPEAK OUT FOR TRUTH” to the

Rotary Club, Jacksonville, Florida.

As an example of the careless rhetoric and ac-

cusations about the business community, Mr. Cort

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.”

His answer: “That's a reasonable demand, but it

implies that we aren't already paying our ‘fair

share.’ My own company has been tagged with

that sort of accusation despite the fact that over

the past 10 years our taxes have averaged $37

million a year more than our net income. Our total

tax expense was nearly $200 million last year,

$155 million in 1970, and more than $1.7 billion for

the 10 years from 1962 through 1971

“So please think twice before swallowing all this

baloney about large corporations not carrying their

fair share of the tax burden.”

if you would like a copy of Mr. Cort'’s entire speech

“SPEAK OUT FOR TRUTH,” and if you would like a

folder telling how to go about activating Truth Squads

write: Public Affairs Dept.. Bethlehem Stee! Corpora-

tion, Bethienein, PA 18016

This Advertisement is scheduled to appear in: Newsweek, Time, U.S. News & World Report, Business Week, Soturdoy Review, industry Week,

. Forbes, Harvard Business Review, Editor & Publisher, and 19 Plant Town Newspapers, the Washington Post, and the Wall Street Journel.

Motion for Temporary Restraining Order Al7

IN VHE

UNITED STATES DISTRICT COURT

For tHe Eastern District or PENNSYLVANIA.

Crvin Action No, 72-1925.

Juny Tria, DEMANDED.

\ RICHARD A. ASH

STEWART S. CORT er at.

MOTION FOR TEMPORARY RESTRAINING ORDER.

Plaintiff: hereby moves the Court for a Temporary

Restraining Order against nominal defendant Bethlehem

Steel Corporation to issue immediately and to be in force

and effect until such time as the Court is able to adjudicate

Plaintiff’s Motion for Preliminary Injunction served upon

counsel of defendants October 6, 1972 and to be formally

filed with*the Court October 16, 1972 pursuant to Rule 36

of the Local Rules of Civil Procedure. Plaintiff hereby

asks the Court for an Order:

Prohibiting Bethlehem Steel Corporation from pur-

chasing or paying for advertising identical to or substan-

tially similar to Exhibit ‘‘A’’ hereof.

In support of this Motion plaintiff incorporates herein

by reference the allegations of his verified complaint.

Plaintiff further alleges as follows:

(1) that a United States federal election is scheduled

for November 7, 1972, approximately 3 weeks from the

date hereof;

Tee ee ee

A18 — Motion for Temporary Restraining Order

(2) that Exhibit ‘‘A’’ hereof is primarily directed at

influencing the outcome of said election;

(3) that injury to plaintiff caused by the continued

placement of advertisements similar to Exhibit ‘‘A’’ prior

to said election is irreparable in nature in that said elec-

tion will result in a final and irreversible selection of office-

holders of the United States including the President of

the United States.

(4) by virtue of the short period of time remaining

prior to the election each day of delay in obtaining relief

changes the position of plaintiff to his detriment, and the

time required for a hearing on Plaintiff’s Motion for

Preliminary Injunction will cause a substantial impair-

ment of the relief obtainable by plaintiff; and

(5) no injury will be caused to nominal defendant

Bethlehem Steel Corporation by reason of the issuance of

the Order here requested.

Wuenrerore plaintiff respectfully requests that said

Motion be granted by the Court.

Cuetts P. Lyman, Esq,

1612 Latimer Street,

Philadelphia, Pa. 19103

Attorney for the Plaintiff.

Order (10/13/72) A19

IN THE

UNITED STATES DISTRICT COURT

For THe Eastern District oF PENNSYLVANIA.

Crvm Action No. 72-1925.

—_——

Jury Tria DEMANDED.

RICHARD A. ASH

v. |

STEWART S. CORT, er at.

ORDER.

Axp Now, this 13th day of October, 1972, it is hereby

ApsupcED, OrperRED and DEcREED as follows: That plain-

tiff’s Motion for a temporary restraining Order is Denizp.

By THE COURT:

/s/ &. Mac TrouTMay,

E. Mac Troutman, U. 8. D. J.

ics inside on aeenemaianmmieametiatie |

1 45; Rabanne iss 2 hip Al alr ene aot

A20 Answer of Defendants

IN THE

UNITED STATES DISTRICT COURT

For tHE Eastern District oF PENNSYLVANIA.

Crviz Action No. 72-1925.

RICHARD A. ASH

STEWART S. CORT, er at.

ANSWER OF DEFENDANTS.

1. Admitted.

2. Admitted.

3. It is admitted that Bethlehem Steel Corporation

is the second largest United States steel producer. It is

denied that annual gross sales exceed 3.5 billion annually.

It is admitted that it maintains plants and offices for the

carrying out of its business throughout the United States,

including the Eastern District of Pennsylvania.

4. It is admitted that Defendants Cort, Foy, Bickford,

Broeker, Reed, Sims, Stott, Baker, Gates, Hobbs, and

Jenkins are individuals residing within the United States,

who comprise the Board of Directors, Cort being the Chair-

man of said Board. It is denied that Jess H. Davis, who

died prior to the institution of this action is a Director.

It is admitted that Defendants Foy, Bickford, Broeker,

Reed, Sims and Stott serve additionally as top echelon

executives, Foy as its President. It is denied that defend-

ants Bickford, Reed, and Stott are Executive Vice-Presi-

dents.

5. It is admitted that the Directors of Bethlehem Steel

Corporation perform the normal policy-making functions

Answer of Defendants A21

of corporate directors, but it is denied that the Directors

participate in each decision relating to the implementation

of corporate policy.

6. Admitted.

7. It is admitted that plaintiff is and was at all times

“relevant hereto the owner of fifty shares of common stock

of Bethlehem Steel Corporation. Defendants are without

knowledge or information sufficient to form a belief as to

the truth of the averments that plaintiff is a citizen of the

United States, and that plaintiff is registered and qualified

to vote in the 1972 United States presidential election.

8. Denied.

9. It is admitted that no demand has been made upon

the Directors of Bethlehem Steel Corporation to seek re-

dress directly in connection with plaintiff’s allegations. It

is denied that the Directors committed, authorized the com-

mission of, or are in any way responsible for or involved

in the commission of any illegal or wrongful acts. It is

denied that there is any wrongdoing out of which the plain-

tiff’s suit arises.

10. Defendants are without knowledge or information

sufficient to form a belief as to the truth of the averments

of paragraph 10 of the Complaint.

11. Admitted.

Count I.

12. Denied.

13. Denied.

14. Each of the averments of paragraph 14 of the Com-

plaint is denied with the exception of the averment that ap-

proximately one-half of the shareholders of Bethlehem Steel

Corporation are ‘‘registered members of the Democratic

political party’’. Defendants are without knowledge or in-

' ’ OP NPR eS Pe ‘it bait : hepa Ce AMTES A iis bts 1) ee canal Sad

LE a

A22 Answer of Defendants

formation sufficient to form a belief as to the truth of the

averment that one-half of the shareholders of Bethlehem

Steel Corporation are ‘‘registered members of the Demo-

cratic political party’’.

15. Denied.

16. Denied as stated.

17. Denied.

18. Denied.

19.

graph

tures

enied. The advertisement referred to in para-

of the Complaint is not partisan and the expendi-

ade for publication of the advertisement were not

made for the purpose of influencing the nomination for

election, or election, of any person to Federal office. The

advertisement. neither endorses nor disparages the candi-

dacy of any nominee for Federal office. The advertisement

does not quote any candidate currently seeking election to

Federal office, nor does it single out by name any candidate

or political party. On the contrary, the advertisement on

its face advocates a non-partisan, issue-oriented approach.

20. Denied.

First Defense.

The Complaint fails to state a claim upon which relief

may be granted.

Second Defense.

Defendant Bethlehem Steel Corporation and Defend-

ants Cort, Foy, Bickford, Broeker, Reed, Stott, Sims,

Baker, Davis, Gates, Hobbs and Jenkins have not been

properly served with process in this action.

Third Defense.

The Court lacks jurisdiction over the person of defend-

ants Cort, Foy, Bickford, Broeker, Reed, Stott, Sims,

Baker, Davis, Gates, Hobbs and Jenkins.

‘

oo ET RES ee Ag SSS ANS SNS RE NER MUR PFE A Oe

Answer 9f Defendants A23

Fourth Defense.

The plaintiff lacks standing to sue.

Fifth Defense.

The expenditures referred to in the Complaint were

not made for the purpose of influencing the nomination for

election, or election, of any person to Federal office.

Sixth Defense.

No expenditures referred to in the Complaint were

used for active electioneering.

Seventh Defense.

The Federal Corrupt Practices Act, 18 U. S. C. $610,

as amended by the Federal Election Campaign Act of 1971,

+s unconstitutional on its face and as applied to defendants

herein because:

(1) The Act abridges the freedom of speech guaran-

teed by the First Amendment of the United States

Constitution ;

(2) The Act abridges the freedom of press guaranteed

by the First Amendment of the United States Consti-

tution ;

(3) The Act abridges the freedom of association, the

freedom of assembly and the right to petition the

Government for a redress of grievances guaranteed by

the First Amendment of the United States Constitu-

tion ;

(4) The Act, in creating a classification of corpora-

tions and labor unions creates an arbitrary, unreason-

able and invidious discrimination against defendants

affecting their exercise of Constitutionally protected

A24 Answer of Defendants

rights, and denies their equal protection of the laws in

violation of the Fifth Amendment of the United States

Constitution ;

(5) The Act arbitrarily and capriciously restricts the

exercise of Constitutionally protected rights depriving

defendants of due process of law in violation of the

Fifth Amendment of the United States Constitution;

(6) In prohibiting ‘‘expenditures in connection with

any’’ Presidential election, the Act on its face is un-

reasonably vague and indefinite in violation of the Due

Process Clause of the Fifth Amendment of the United

States Constitution.

Count II.

21. Denied.

22. Defendants incorporate by reference the answers

to paragraphs 1 through 20, to Count I.

23. Denied.

First Defense.

The Complaint fails to state a claim upon relief can

be granted.

Second Defense.

Defendant Bethlehem Steel Corporation and Defend-

ants Cort, Foy, Bickford, Broeker, Reed, Stott, Sims, Baker,

Davis, Gates, Hobbs and Jenkins have not been properly

served with process in this action.

Third Defense.

The Court lacks jurisdiction over the person of de-

fendants Cort, Foy, Bickford, Broeker, Reed, Stott, Sims,

Baker, Davis, Gates, Hobbs and Jenkins.

Pe mE ARRAY TER 4

Answer of Defendants A25

Fourth Defense.

The Court lacks jurisdiction over the subject matter

of Count IT.

Wuererore, defendants Bethlehem Steel Corporation,

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 8S.

Gates, Robert B. Hobbs and George P. Jenkins, respectfully

request that the Complaint be dismissed and that plaintiff

be directed to pay their reasonable expenses including at-

torneys’ fees incurred by reason of this action.

/s/ Evwin P. Rome,

Edwin P. Rome,

Jerome R. RicHTER,

Attorneys for Defendants,

Bethlehem Steel Corporation,

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 8S. Gates, Rob-

ert B. Hobbs and George P.

Jenkins.

Of Counsel:

Buank, Rome, Kraus & ComISskEY,

Four Penn Center Plaza,

Philadelphia, Pennsylvania. 19103

215 LO 9-3700

A26 Motion for Preliminary Injunction

IN THE

UNITED STATES DISTRICT COURT

For THE Eastern District or PENNSYLVANIA.

Civiz Action No. 72-1925.

Jury TrraL DEMANDED.

RICHARD A. ASH

STEWART S. CORT er at.

MOTION FOR PRELIMINARY INJUNCTION.

Plaintiff hereby moves the Court for a preliminary in-

junction against nominal defendant Bethlehem Steel Cor-

poration and against the twelve defendants herein, all of

whom are directors of Bethlehem Steel Corporation. Plain-

tiff hereby asks the Court for an Order:

1. Prohibiting individual defendants from causing

Bethlehem Steel Corporation to purchase or pay for any

advertising in connection with any federal election, includ-

ing but not limited to advertisements identical or substan-

tially similar to Exhibit ‘‘A’’ hereof.

2. Prohibiting Bethlehem Steel Corporation from pur-

chasing or paying for any advertising in connection with

any federal election, including but not limited to advertise-

ments identical to or substantially similar to Exhibit ‘‘A’’

hereof.

Motion for Preliminary Injunction A27

3. Directing Bethlehem Steel Corporation to cancel ail

advertising previously ordered in connection with any fed-

eral election, including but not limited to advertisements

identical to or substantially similar to Exhibit ‘‘A’’ hereof.

4. Prohibiting Bethlehem Steel Corporation from using

its personnel or property for the distribution of advertising

materials, copies of speeches, or any other communications -

whatsoever in connection with any federal election, includ-

ing but not limited to Exhibit ‘‘A’’ hereof.

5. Prohibiting Bethlehem Steel Corporation from mak-

ing any expenditures whatsoever in connection with a fed-

eral election.

In support of the above requests, plaintiff incorporates

herein by reference the allegations of his verified complaint.

/s/ Cuetus P. Lyman,

Cletus P. Lyman, Esq.,

1612 Latimer Street,

Philadelphia, Pa. 19103

Ben pec. th DORE Ne hipmetgenaag ene

A28 Stipulation of Agreed Upon Facts

IN THE

UNITED STATES DISTRICT COURT

or THE Hastern District oF PENNSYLVANIA.

Crviz Action No. 72-1925.

RICHARD A. ASH

STEWART S. CORT er At.

STIPULATION OF AGREED UPON FACTS.

Anp Now, this 20th day of October, 1972, the following

facts are hereby stipulated and agreed to by and between

plaintiff and defendants:

1. Bethlehem Steel Corporation (Bethlehem) is a Dela-

ware corporation engaged primarily in the business of steel

production, with a principal office in Bethlehem, Penn-

sylvania.

2. Bethlehem is the second largest producer of steel in

the United States, and in 1971 it had net sales of approxi-

mately $2,963,602,000 and net income of approximately

$139,239,000.

3. Bethlehem had on September 30, 1972 about 202,670

stockholders who owned about 44,469,541 shares of common

stock, which were outstanding on that date. The market

value of each share of common stock during 1972 has ranged

from a high of $345% to a low of $25%, and the closing

value of a share of common stock on October 16, 1972 was

$25%. Plaintiff, who owns fifty shares of such common

stock, has owned said stock for more than one year.

Stipulation of Agreed Upon Facts A29

4. Plaintiff resides in Philadelphia, Pennsylvania, is a

United States citizen, and is registered and able to vote in

the United States presidential election on November 7, 1972.

5. In connection with the September 11, 1972, mailing

of a quarterly dividend to its stockholders, Bethlehem in-

cluded in the mailing envelope sent to each stockholder a

reprint of an advertisement (the ‘‘ Advertisement’’) en-

titled, ‘‘I say, let’s keep the campaign honest. Mobilize

‘truth squads’. . .’’. A true and correct copy of the

Advertisement is attached hereto as Exhibit ‘‘A’’.

6. The Advertisement appeared from on or about

August 22, 1972 until September 7, 1972 in various media

of national and local circulation, including ‘‘Newsweek”’,

‘““Time’’, “‘U. S. News and World Report’’, ‘Business

Week’’, ‘‘Saturday Review”’, ‘‘Editor and Publisher’’, and

19 local newspapers in towns in which Bethlehem has

plants.

7. Exhibit ‘‘B’’ attached is a true and correct copy of

the August 28, 1972, edition of ‘‘Time”’ magazine wherein

the Advertisement appeared, facing page number 61. »

8. Various magazines in which the Advertisement ap-

peared, including ‘‘Time’’, ‘‘Newsweek”’ and ‘‘U. S. News

and World Report’’, are distributed nationally to sub-

scribers and by sale at newsstands throughout the United

States.

9. ‘“Time’’, “‘Newsweek”’ and ‘‘U. 8. News and World

Report’’ are published weekly and have substantial citcu-

lation.

10. The Public Affairs Department of Bethlehem as

indicated in the Advertisement will send to each person on

request a copy of Mr. Cort’s speech entitled ‘‘Speak Out

for Truth’’, a copy of which is attached hereto.as Exhibit

A30 ' Stipulation of Agreed Upon Facts

“©”, and a copy of a folder entitled ‘‘How you can help

to keep the campaign honest”’, a copy of which is attached

hereto as Exhibit ‘‘D’’.

‘11, The placement and purchase of the Advertisement

and the printing and mailing of Exhibits ‘‘C’’ and ‘‘D”’

have been, and are being paid for out of the general corpo-

rate funds of Bethlehem.

12. Bethlehem may cause the Advertisement to appear

in the future in media of national and local circulation.

13. The mailing by Bethlehem of Exhibits ‘‘C’’ and

“‘D”’, as stated in paragraph 10 hereof, is continuing at

present and may continue in the future. Approximately

5,500 copies of Exhibits ‘‘C’’ and ‘‘D’’ have been sent, as

stated in paragraph 10 hereof.

14. A Federal election is scheduled for November 7,

1972, at which voters will have an opportunity to vote for

- electors for the Presidency and Vice-Presidency of the

United States, and for various other Federal offices includ-

ing members of Congress.

15. The Republican party nominee for the Presidency

is Richard M. Nixon and the Democratic party nominee is

George McGovern.

— [Bf

Cletus P. Lyman,

Counsel for Plaintiff.

/s/ Epwin P. Rome,

Edwin P. Rome,

Counsel for Defendants.

Exhibit

"a* A31

| say lets keep

the campaign honest

Mobilize truth squads...

Stewart S. Cort, Chairman

Bethlehem Steel Corporation

“Why do | see this need? Because several months ago

we lived through a number of political primary cam-

paigns. And it ought to be clear to all of us that there

have been times when truthfulness took an awful beat-

ing. And now we have a presidential campaign ahead,

during which we can clearly see a lot more of the same.

“I’m thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community.

“Right now, look at every candidate's declared political

programs. Analyze every issue. If you think any of

them are faulty, ill-founded, or misleading, prepare

your own answers and use those answers to set the

record straight. I’d suggest that groups with a deep

interest in good government organize programs to en-

courage responsible, honest, and truthful campaigning.

Mobilize “truth squads,” perhaps.

“One thing you can do is talk in advance with the

communications media in your area—newspaper pub-

lishers, editors, reporters, radio and television people,

and magazine publishers. Alert them to the kinds of

false statements that are likely to be made and show

them how and why those statements are false or de-

ceptive. Give them the facts. They're likely to take

a highly responsible position in reporting what the

politicians say if they’re forewarned.

“And when outrageous accusations are reported in the

media, you ought to refute them immediately. You can

do it if you're properly prepared. Plan to attend politi-

cal functions and stand up when spokesmen are off

base. Concerned citizens ought to do this; it’s nothing

more than true democracy in action.”

From a talk “SPEAK OUT FOR TRUTH” to the

Rotary Club, Jacksonville, Florida.

As an example of the careless rhetoric and ac-

cusations about the business community, Mr. Cort

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.”

His answer: “That's a reasonable demand, but it

implies that we aren't already paying our ‘fair

share.’ My own company has been tagged with

that sort of accusation despite the fact that over

the past 10 years ovr taxes have averaged $37

million a year more than our net income, Our total

tax expense was nearly $200 million last year,

$155 million in 1970, and more than $1.7 billior: for

the 10 years from 1962 through 1971.

“So please think twice before swallowing al! this

-baloney about large corporations not carrying their

fair share of the tax burden.”

i you would like a copy of Mr Cort's entire speech

‘SPCAK OUT FOR TRUTH.” and if you would like a

folder telling how to go about activating Truth Squads

write Public Affairs Dept. Betnienem Stee! Corpora-

tion, Bethienein PA 18016

This Advertisement is scheduled to appear in: Newsweek, Time, U.S. News & World Report, Business Week, Saturday Review, industry Week,

Forbes, Harvord Business Review, Editor & Publisher, ond 19 Plant Town Newspapers, the Washington Post, and the Woll Street Journal.

COR CA EE REID EAI

PLM ET Os

Exhibit "C" A32

SPEAK

OUT

FOR TRUTH

STEWART S. CORT

Chairman

Bethlehem Steel Corporation

Rotary Club

Jacksonville, Florida

June 12, 1972

oe eres

Exhibit "C" A33

Stewart S. Cort

The title of my talk consists of four words of

advice: “Speak Out For Truth.”

Why do I see this need? Because we've re-

cently lived through a number of political primary

campaigns—in Florida and in my own state, Penn-

sylvania—and it ought to be clear to all of us that

there have been times when truthfulness took an

awful beating. And now we have a long presi-

dential campaign ahead, during which we can

dearly see a lot more of the same.

I'm thinking of the careless rhetoric and ac-

cusations that are being thrown around these days—

their main target being the business community.

Ill give you a few examples of what I have in

mind:

In a recent speech in Pittsburgh, a prominent

presidential candidate said this: “What you have

in Washington tdday is government of the money,

by the money, and for the money. We're going to

drive the money-changers out of the temple.” ;

At a conference in Washington last month a

potential presidential candidate said this: “To me,

the ITT case says it all. The doors of the White

House are open wide to every chairman of the

board, but they are closed tight to the American

working man.”

As for business taxation, one of the candidates

said this: “The time has come for a tax system that

says to big business—you must pay your fair share.”

That’s a reasonable demand, but it implies that

we aren’t already paying our “fair share.” My own

company has been tagged with that sort of accusa-

]

+ Oss maetaRengteNRRIRRtaR ARIE

Exhibit "C" A34

tion despite the fact that over the past 10 years our

taxes have averaged $37 million a year more than

our net income. Qur total tax expense was nearly

$200 million last year, $155 million in 1970, and

more than $1.7 billion for the 10 years from 1962

through 1971.

So please think twice before swallowing all

this baloney about large corporations not carrying

their fair share of the tax burden.

But corporations aren't the only targets. One

candidate talks about “$28 billion in tax loopholes

for the rich and powerful” and he calls for tax

reform and other economic policies that, in the

words of Chet Huntley, are “far to the left of

Norman Thomas.”

Put it all together and you'll see, as many

observers have already warned, that business en-

terprise is sure to be a major issue during the up-

coming presidential campaign. It’s bound to be; the

temptation is irtesistible, at least to anyone who puts

political advantage above all else. -

As is perfectly clear to you, I don’t share the

views of those extreme critics of our society. But I

certainly do admit that severe criticism is very much

in fashion. It has all the earmarks of a vote getter.

It'll get votes from the ideological extremes, from

both extremes. It'll get votes from those who are

terribly disillusioned, frustrated, and fearful. And

it'll get votes from people who don't have that one

commodity that has always sustained the American

people, no matter how unhappy their circumstances .

—I refer to hope.

A campaign based on cynicism and mistrust

will surely meet some measure of success because

the way has been cleared by an army of malcon-

tents. They've filled the bookshelves with volumes

calling our society The Sick Society; branding

the nation as America, Incorporated;. saying we

victimize the public In The Name of Profit and

Exhibit "C" A35

deploring what has been called “Consciousness |

and II.” . The illness and the cure are documented

in what has becn titled A Populist Manifesto.

And, when the Committee for Economic De-

velopment issued a booklet urging all business firms

to accept a high degree of social responsibility, it

was grected with these words, written by one of the

most prominent columnists for one of the country’s

most prominent newspapers:

“The mania of maximization of proht

‘seems to turn businessmen into economic

Richard Specks, people so demented that

they will have that Jast dollar although,

if they were sane, they'd know that to

make it they must sacrifice their own

physical health and well-being.”

With that sort of propaganda flooding us, no

wonder a recent survey found that 46 percent of

all Americans think big business is “dangerous to

our way of life.” This is plain nonsense. Would

nearly every American family have a car if it

weren't for so-called “big business’? Would we

have telephones and television and indoor plumbing

in most homes? Would we have the levels of edu-

cation and nutrition and health care that, however

imperfect, are the envy of most human beings clse-

where on this planet?

Well, | won't take your time defending “big

business.” Even when the critics aim their blasts

at “big business,” the fallout injures all businesses,

big and small, and a lot of citizens who aren't even

“businessmen.”

Is this of any concern to you? You bet it is!

Consider, for a moment, the current epidemics of

shoplifting and vandalism. Sure, we've always had

to contend with larceny and destructive individuals,

but has this kind of conduct ever before been con

doned by whole groups in our sxxiety? Today the

so-called “rip-off” has become a sort of art form and

Exhibit "C" A36

a folk religion.

Are businessmen the only ones who suffer be-

cause of shoplifting? You know the answer. We

all suffer because of the resulting higher prices.

We all pay the high costs of preventing vandalism

and repairing its damages.

And let me read you a sad little item that ap-

peared in one of our local newspapers on May 13th:

“The owners of a shop in Allentown

wanted to run a store which sold things to

kids at reasonable prices, that didn’t ‘rip-

off’ the customers. In appreciation, the

shoplifters went to work on them. ‘The

kids steal anything they can get their

hands on and put in their pockets,’ said

one proprietor. ‘We try to sell things at

a low price, but it seems some people just

have to steal’.”

I don’t think I have to add anything to that

newspaper story. It speaks for itself. Ask yourself

whether the situation will improve, or get worse, if

the upcoming political campaign features the na-

tion’s leading politicians preaching that business is

evil, that it makes excessive profits by gouging and

cheating and deceiving the American public. It’s

something to think about.

Now let’s take a look at another specific issue

that ought to concern you and me. Everybody’s

talking about tax reform, but watch out for thetoric

about “closing the loopholes” that only benefit “the

rich and powerful.” As The Wall Street Journal

commented the other day, one of the biggest so

called “loopholes” is the provision enabling home-

owners to deduct mortgage interest and property

taxes from Federal taxable income.

Well, there are many millions of homeowners

in this country and they aren’t all “rich and power-

ful.” Most of them are just ordinary citizens. And,

as a matter of fact, I always thought there was a

om |

ht 00 ta iD her Wild ad A AL ot

Exhibit "C" | A37

sound public policy behind those deductions—to

encourage people to own their own homes. Take

the deductions away and I doubt you'd prevent

wealthy people from owning homes, but you'd

surely make it tough on everybody else.

And, talking about personal income taxes, is

there a single person, here who thinks his taxes are

too low? Well, there are candidates who think

they're way too low. eo ,

And that’s only the beginning. There are

proposals te virtually confiscate inheritances over @

certain amount; to end the tax exemption for state

and municipal bonds; to reduce depletion and de-

preciation allowances; to outlaw the tax limitations

"on capital gains—you name it, somebody's talking

about it.

But there's no need for me to go on and on.

You've heard all those proposals, and I hope you

see them as I do—not so much as threats to people

who are wealthy, but threats to everyone who asks

nothing more than the same opportunities that ”

Americans have always had.

In fact, the avowed purpose of all those pro-

posals is to give the government even greater power

to redistribute income.

Now, don’t get me wrong. The stated ob-

jectives are very worthy—to use that power to stamp

out poverty; to improve health care; to’ provide jobs

for every American; to eliminate the inequities in.

our society.

All those aims are wholly admirable and we

should strive to achieve them. But is this the way

to do it? I can’t imagine how destroying individual

incentive and confiscating savings can possibly pro-

vide more employment. It would, in fact, have the

opposite effect.

But I won't quibble over specific points. Let

me focus on the broadest aspect of this thing, and

‘

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Daten ee MENS ath Sd eh A it aS REN i aN ADL A aiken arbi RRO O ARE Rit Sen wen acid oa WM

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ne tee eee, ent ane Shan we os

Exhibit "C" A38

that’s the really important issue. What I have in

mind is nothing less than individual freedom. The

kind of collectivized society those people are talking

about is the greatest threat on earth to our freedom.

In mid-May William F. Buckley gave a talk in

my community. I wasn’t able to attend, but the

next morning's paper reported this:

“Mr. Buckley said there is an increas

ing tendency of Americans to trade in

their many freedoms for bits of economic

and social security.”

the paper. It was a dispatch from the Times of

London; maybe it appeared in your local papers.

It summarized a report from Sweden, and

Sweden, as you probably know, is the most highly

brea

the interests of equality, most things in

Sweden arg standardized. In the words of the

report: “It}i true that if you have seen one Swed-

ish town, you've seen them all .... Swedish flats

and houses are so much alike that you can enter any

kitchen in the country and usually know where the

rubbish bin is located.” How'd you like living

under those conditions?

But here’s the worst part of it. Listen to this:

“Many observers believe that some chilling aspects

of the ‘1984’ society appeared in Sweden several

years ago.” This type of society, writes the Swed-

Exhibit "C" A39

ish psychiatrist who prepared the report, “leads to

a prodigious, human-crushing process.”

Is that what the so-called “populist” movement

in America really wants—to crush the human

spirit? One of the great ironies of it all is that the

populist movement is seen as @ rebirth of Jeffer-

sonian philosophy. Now, that's a strange thing,

because I’ve checked into what Thomas Jefferson

thought this country is all about, and his ideas are

remarkably fitting today.

Listen to these words on taxation and govern-

ment spending, written in 1816:

“.., private fortunes are destroyed by

public as well as by private extravagance.

And this is the tendency of all human

governments . . . . till the bulk of society +s

reduced to mere automatons of misery, to

have no sensibilities left but for sinning

and suffering....And the fore horse of

this frightful team is public debt. Taxa-

tion follows that, and in its train wretch-

edness and oppression.”

As sure as I’m standing here, the economic

now being preached by some political

candidates would, if implemented, bring an end to

and freedom as we know it in this land,

not overnight, but in the foreseeable future.

This is not to say that continual and gradual

changes in our society aren't needed, and needed

badly. There's still a lot of inequity in our land;

there’s a lot of poverty; there's a lot of suffering that

must be remedied. But we must find a way to do

it that doesn’t stop our economy in its tracks—a way

that doesn’t wipe out the individual liberties that

have made us a proud country, with every right to

be proud. !

That’s more than enough moralizing. I'm not

a philosopher; I'm a practical man. And that’s why

Exhibit "C" A40

I’d like to give a few practical suggestions. The

political campaigns are coming. And, as I've

pointed out, we know what a lot of the candidates

are going to be saying. I say, let's keep them

honest.

Right now, look at their declared political pro-

grams. Analyz every issue. If you think any of

them are faulty, ill-founded, or misleading, prepare

your own answers and use those answers to set the

record straight. I'd suggest that groups like this

one, groups wth a deep interest in good govern-

ment, organize programs to encourage responsible,

honest, and truthful campaigning. Mobilize “truth

squads,” perhaps.

One thing you can do is talk in advance with

the communicitions media in this area—newspapet

publishers, edtors, reporters, radio and television

people, and magazine publishers. Alert them to

the kinds of false statements that are likely to be

made and show them how and why those statements

are false or deceptive. Give them the facts.

They're likely to take a highly responsible position

in reporting what the politicians say if they're

forewarned.

And wha outrageous accusations are reported

in the media you ought to refute them immedi-

ately. You an do it if you're properly prepared.

Plan to atterd political functions and stand up

when spokesnen are off base. Concemed citizens

ought to do this; it's nothing more than true de-

mocracy in action.

_ T've quaed Thomas Jefferson before and I'll

quote him just one more time. It seems that Jef-

ferson didn’t like long-winded speeches. In 1824,

in a letter tothe president of a debating society, he

said this: ‘Amplification is the vice of modern

oratory. It is an insult to an assembly of reasonable

men, disgustng and revolting instead of persuading.

Speeches measured by the hour, die with the hour.”

That's good advice, and I'll follow it. Thank you!

‘Exhibit "Cc" A4l

Public Affairs Department

Bethlehem Steel

Bethlehem,PA 18016

Booklet 2901 728, Printed in U.S.A.

Exhibit "D" A42

How

you can help

to keep

the campaign

honest

There are many things you can do—either as

an individual, or as a member of an organization—

to help promote responsible, truthful campaigning

by political candidates. We urge your full parti-

cipation.

Become informed. Determine what the major

issues are in this year's elections—such as Vietnam,

inflation, taxes, unemployment, environment, for-

eign affairs, busing, and law and order. Read

books, magazines, periodicals, and — to gain

—. read n pers to follow current

tren — a habit of watching televised news

rograms, an listening to radio reports. Discuss

os issues with your friends, neighbors, and business

associates.

In addition, find out what the candidates stand

for. What are their and political philoso-

phy? What have their records on major

issues? What are their qualifications for office?

. Forewarn the communications me-

dia about possible false statements that could be

made by — candidates. Also, advise news-

paper publishers, editors, reporters, radio and tele-

vision peopl , and magazine publishers of any fal-

lacies in the political programs of candidates. Use

Exhibit "D" A43

facts and illustrations, and give them the sources of

your material.

If you work for a fairly large business organi-

zation, see to it that your sales people and egis

lative representatives are advised to report any fa

or misleading statements that come to their atten-

tion, so that appropriate rebuttal can be made. En-

courage your executives to accept speaking engage-

ments and to urge their audiences to keep candi-

dates honest.

Be inquisitive. Scrutinize articles and specches

by candidates. When you encounter a statement

that seems unlikely, or is inconsistent with your

own knowledge, check on it. Your sources, of

i ye ‘ with the —_ ou are —

ing, but the following ma to you: e

a Guide to Periodical aia an the

Public Affairs Information Service at your local

library include a listing of current books, magazine

and periodical articles, and government documents.

Also, use encyclopedias and almanacs; informational

services of chambers of commerce, and other local

business associations. Keep in touch with the public

affairs or public relations offices of major corpora-

tions or of national organizations such as the Na-

tional Association of Manufacturers, the Chamber

of Commerce of the United States, and various

trade associations or technical societies. Or ask the

candidate himself to provide the source of his in-

formation. If the facts contradict the statement

you are researching, document your sources.

Correct the record. If you are attending an

open meeting at which a political candidate—or

anyone a a Sts cans ae be

wrong, stand up and question him, ps during

re If that is not

possible, or if you hear or read such a statement in

Sn caoaereee ec setengen stich pati

an ision stations or newspapers whi i-

cized the incorrect information, and perhaps to local

newspapers in areas where the statement was heard

Exhibit "D" Aas

or read. Make your communications: positive in

tone; cite relevant facts and figures to prove your

point.

Follow up. To the extent possible, check fu-

ture statements of the candidate to be sure ..e has

corrected the wrong information he has been using.

lf he has, write thank him. If not, some of the

following steps might be indicated: write or wire

the local, state, or national leader of the candidate's

political party, asking that he or she intervene;

write or tel ~ officials of your tn = —

suggesting that they prepare an editorial on the

sieaniad ae that aay Tiscush the issue in their

news articles or programs.. Communicate again

_with the candidate, telling him of the steps you

have takea and strongly urging him to correct the

wrong information he is using.

Talk with people. Talk with everyone with

whom you come in contact about your efforts to ,

promote responsible campaigning. Discuss the in-

correct statements that have been made, and tell

our listeners who made them. Encourage them to

sabe active in their own localities.

Finally, form “Truth Squads.” Involve your

friends, neighbors, church business organi-

zations, civic clubs and in the effort to

promote truthful, honest political campaigning. Di-

vide the research and communication work among

members of the Squad and meet periodically to

discuss issues and projects, and to share information. _

Have each participant communicate with the off-

cials su above in every instance where an

irresponsible or incorrect statement is identified.

Public Affairs Department

Bethlehem Steel Corporation

Bethlehem, PA 18016

Folder 2902 728, Printed in U.SA.

Oe we

— e

p— |

Amended Motion for Preliminary Injunction A45

IN THE

UNITED STATES DISTRICT COURT

For tue Eastern District or PENNSYLVANIA

Crvi Action No. 72-1925.

RICHARD A. ASH

STEWART 8S. CORT ET AL.

AMENDED MOTION FOR PRELIMINARY

INJUNCTION.

Plaintiff hereby amends his motion for preliminary in-

ction and asks that.the Court grant a preliminary in-

ction against corporate defendant Bethlehem Steel

rporation only in accordance with a proposed prelimi-

‘y injunction, findings of fact and conclusions of law

mitted herewith.

/s/ Cuetus P. Lyman,

‘Cletus P. Lyman,

1612 Latimer Street,

Philadelphia 19103 -

Counsel for Plaintiff.

A46 Findings, Conclusions and Order (10/25/72)

_ IN THE

UNITED STATES DISTRICT COURT.

For THe Eastern District or PENNSYLVANIA.

Crvi. Action No. 72-1925.

RICHARD A. ASH

Pu&za APARTMENT

18TH & Bensamin FRanKuIN Parkway

Pumapeipata, Pa. 19104 .

On Benatr or HIMmseEtr, AND

on BEHALF OF

BETHLEHEM STEEL CORPORATION

701 East Tuirp Street

BETHLEHEM, Pennsy.vani4 18016

| @.

STEWART S. CORT, CHainman

LEWIS W. FOY, Present 3

EDWARD D. BICKFORD, Vice Presmenr

BERNARD D. BROEKER, Vice Present

ALBERT M. REED, Vice Present

C. THOMPSON STOTT, Vice Present

IVOR D. SIMS, Vice Present

WDUS BAKER : :

JESS H. DAVIS ;

THOMAS 8S. GATES

ROBERT B. HOBBS ;

GEORGE P. JENKINS,

Berne Directors oF ’

BETHLEHEM STEEL CORPORATION

AND

BETHLEHEM STEEL CORPORATION

701 East Tump Street

BETHLEHEM, Pennsytvania 18016 3

Findings, Conclusions and Order (10/25/72) A47

FINDINGS OF FACT, CONCLUSIONS OF

LAW AND ORDER.

TRouTMAN, J. October 25, 1972.

The Court, having considered the verified complaint, .

the answer and a stipulation of facts entered into by re-

spective counsel and having heard oral argument, now

makes the following findings of fact and conclusions of law

pursuant to F. R. .Civ. P. 52(a).

Fruxpines or Fact.

1. Plaintiff resides in Philadelphia, Pennsylvania, is a

United States citizen, and is registered and able to vote in

the United States presidential election on November A

1972.

2: Plaintiff is and was at all times relevant hereto the

owner of fifty shares of common stock of Bethlehem Steel

Corporation.

3. Bethlehem Steel Corporation (Bethlehem) is a Dela-

ware corporation-engaged primarily in the business of steel

production, with a principal office in Bethlehem, Penn-

sylvania.

4. Bethlehem is the second largest producer of steel in

the United States, and in 1971 it had net sales of approxi-

mately $2,963,602,000 and net income of approximately

$139,239,000 : :

5. Bethlehem had on September 30, 1972 about 202,670

stockholders who owned about 44,469,541 shares of common

stock, which were outstanding on that date. The market

value of each share of common stock during 1972 has ranged

from a high of $345 to a low of $257%,, and the closing value

of a share of common stock on October 16, 1972 was $25%,.

A48 Findings, Conclusions and Order (10/25/72)

Plaintiff, who owns fifty shares of such common stock, has

owned said stock for more than one year.

6. In connection with the September 11, 1972, mailing.

of a quarterly dividend to its stockholders, Bethlehem in-

cluded in the mailing envelope sent to each stockholder a

reprint of an advertisement (the ‘‘Advertisement’’) en-

titled, ‘‘I say, let’s keep the campaign honest. Mobilize

‘truth squads’. . .’’ (Exhibit A).

7. The advertisement appeared from on or about

August 22, 1972 until September 7, 1972, in various media

of national and local circulation, including ‘‘ Newsweek’’,

‘‘Time’’, ‘‘U. S. News and World Report’’, ‘‘Business

Week’’, ‘‘Saturday Review’’, ‘‘Editor and Publisher’’ and

nineteen local newspapers in towns in which Bethlehem has

plants. *

8. Various magazines in which the advertisement ap-

peared, including ‘‘Time’’, ‘‘ Newsweek’’ and ‘‘U. S. News

and World Report’’ are distributed nationally to sub-

scribers and by sale at newsstands throughout the United

States.

9. ‘*Time’’, ‘‘ Newsweek’’ and ‘‘U. S. News and World

Report’’ are published — and Rave substantial cir-_

culation.

10. The Public Affairs Department of Bethlehem as in-

dicated in the advertisement will'send to each person on

request a copy of Mr. Cort’s speech entitled ‘‘Speak Out for

Truth’’, and a copy of a folder muted ‘‘How you can help

to keep the campaign honest’’.

_ 11. The placement and purchase of the advertisement

and the printing and mailing of Mr. Cort’s speech and the

folder entitled ‘‘How- you can help to keep the campaign

honest’’ have been, and are being paid for out of the general

corporate funds of Bethlehem. ~ :

ae,

Findings, Conclusions and Order (10/25/72) AA49

12. Bethlehem may cause the advertisement to appear

in the future in media of national and local circulation.

18. The mailing by Bethlehem of Mr. Cort’s speech

and the folder entitled ‘‘How you can help to keep the

campaign honest’’ is continuing at present and may con-

tinue in the future. Approximately 5,500 copies of the

speech and folder have been sent.

’ 44. A’ Federal election is scheduled for November 7,

1972, at which voters will have an opportunity to vote for

electors for the Presidency and Vice-Presidency of the

United States, and for various other Federal offices, in-

cluding members of Congress.

15. The advertisement, the speech and the folder do

not mention by name any person currently a candidate

for any local, state or Federal office, and they do not en-

dorse or disparage the candidacy of any person currently

seeking election to any local, state or Federal office.

16. The advertisement, the speech and the folder state

a variety of viewpoints on issues which voters may face

in the upcoming elections, without identifying any particu-

lar candidate with any particular political view.

Discussion.

, Beginning on August 22, 1972, the ‘‘advertisement”’

about which plaintiff complains appeared in various news

media and was distributed to shareholders of the defend-

ant corporation, Bethlehem Steel Corporation, on Septem-

ber 11, 1972. On October 16, 1972, plaintiff formally filed

a complaint seeking a preliminary injunction restraining

such advertisement. On October 11, 1972, at about 5 P. M.,

plaintiff applied for a temporary restraining order. After

notice, hearing was held on October 13, 1972, and said ap-

A50 Findings, Conciusions and Order (10/25/72)

plication was denied. Thereafter, the parties conferred

and appeared before the Court on October 20, 1972, sub-

mitting a stipulation of facts in lien of testimony, upon

which we base the foregoing ‘‘findings of fact’’. Proposed

amended findings and conclusions were submitted to the

Court on October 24, 1972, and because of the coming Fed-

eral election on November 7, 1972, plaintiff seeks an imme-

diate decision. Therefore, time does not permit the prep-

aration and filing of an expanded and detailed discussion

and opinion.

For the purpose of this application for a preliminary

injunction, it is sufficient to say that a party seeking a

preliminary injunction must establish by clear, positive

proof the existence of four essential preconditions td the

granting of injunctive relief: (1) irreparable harm to him-

self absent an injunction; (2) the absence of substantial

harm to the defendants; (3) the absence of harm to.the

public interest; and (4) a likelihood that he will prevail

on the merits. Winkleman v. N. Y. Stock Exchange, 445

F. 2d 786, 789 (3d Cir. 1971); Nelson v. Miller, 373 F. 2d

474, 477 (3d Cir. 1967). Failure to adequately establish

at least a reasonable probability of success on the merits '

justifies denial of an injunction on this ground alone. In-

dustrial Electronics Corp. v. Cline, 330 F. 2d 480, 482 (3d

Cir. 1964).

Title 18 U. S. C. § 591, as amended, defines, as follows,

the term ‘‘expenditure’’ as otherwise used in the Act:

‘*(f) ‘expenditure’ means—

‘(1) a purchase, payment, distribution, loan, ad-

vance, deposit, or gift of money 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 busi-

ness), made for the purpose of influencing the nomina-

Anis

Se Se Ae ee LK

ss ere

Findings, Conclusions and Order (10/25/72) Adl

tion for election, or election, of any person to Federal

office, for the purpose of influencing the result of a

primary held for the selection of delegates to a na-

tional nominating convention of a political party or

for the expression of a preference for the nomination

of persons for election to the office of President, or

for the purpose of influencing the election of delegates

to a constitutional convention for proposing amend-

ments to the Constitution of the United States;

‘(2) a contract, promise, or agreement, express or

_ implied, whether or not legally enforceable to make

any expenditure; and

‘(3) a transfer of funds between political com-

mittees.’ ”? (Emphasis supplied)

Thus, as defined, it contemplates a specific purpose; i.e.,

influencing the election of a person to Federal office. Title

18 U. S. C. § 610 then continues:

““§ 610. Contributions or expenditures by national

banks, corporations, or labor organizations.

‘‘ 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 regu-

lations 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 stock-

holders and their families or by a labor organization

to its members and their families on any subject; non-

A52 Findings, Conclusions and Order (10/25/72)

partisan 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 mem-

bers and their families; the establishment, administra-

tion, and solicitation of contributions to a separate

segregated fund to be utilized for , political purposes

by a corporation or labor organization; Proven, that

it shall be unlawful for such a fund to make a contribu-

tion or expenditu?e by utilizing money or anything of

value secured by physical force, job discrimination,

financial reprisals, or the threat of force, job discrim-

ination 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.’’

It is a criminal statute imposing, for its violation, a fine

and penalty.

Thus, at the very threshhold, the plaintiff must estab-

lish an implied cause of action under said statute. Civil

actions may be implied from criminal statutes designed to

protect a specific class. Common Cause v. Democratic

National Committee, 333 F. Supp. 803 (D. D. C. 1971).

The purpose of Section 610 is to assure a popularly elected

government for all the people in the United States and its

main concern is to ‘‘eliminate the effect of aggregated

wealth in Federal elections’’. Pipefitters Local Union No.

562 et al. v. United States, — U. S. — (June 22, 1972).

True, a secondary concern of Section 610 is to protect dis-

senting or minority shareholders, of which plaintiff is one.

Thus, since the primary purpose of the Act was to protect

the public, rather than dissenting shareholders, a sub-

stantial showing of congressional intent is required to

provide an implied cause of action. Congress expressly

Findings, Conclusions and Order (10/25/72) Ad8

vested in the Department of Justice the authority to en-

force the Act. The sanctions imposed are purely penal

in nature. On this record, we cannot hold, as plaintiff con-

tends, that a private cause of action must be implied be-

cause the Department of Justice resources are inadequate

to enforce the Act and thereby are inadequate to protect the

public interest. Neither can we assume the partisan en-

forcement of the Act as plaintiff suggests. We, therefore,

: hold that the penal sanctions imposed are exclusive and

| that no private cause of action is implied. Chavez v.

| Freshpict Foods, Inc., 456 F. 2d 890 (10th Cir. 1972). For

this reason alone an injunction must be denied.

The second issue arises, namely, whether the adver-

tisement constitutes a violation of Section 610, which

proscribes any expenditure or contribution to a candidate,

campaign committee, political party or organization in con-

nection with any Federal election. Section 591 defines ex-

penditure as used in Section 610 as ‘‘. . . anything of value

_ . for the purpose of influencing the nomination for

election or election of any person to federal office.’ Here,

the ostensible purpose—apparent on the face of the ad-

vertisement—is to mobilize and seek honest campaigns.

Only incidentally does it seek to refute the statement of

an unnamed candidate for political office. There is nothing

in the Act which suggests a corporation or a labor union

must sit idly by <s accusations are being made against it

or the industry or segment of the business community of

which it is a part. The advertisement or article is not

directed to the election of a specific person or persons Or,

indeed, of any persons to Federal office, as contemplated by

18 U. S. C. §591(f). Neither is it directed to a specific

candidate, campaign committee, political party or organiza-

tion, as contemplated by 18 U.S. C. § 610.

We conclude that the purpose of the advertisement was

not to influence the election of a specific candidate, but

A54 Findings, Conclusions and Order (10/25/72)

rather to seek an honest campaign and election and, inci-

dentally, to respond to an accusation leveled against the

business community. Thus, the payment for the advertise-

ment did not constitute an ‘‘expenditure’’ within the

meaning of Section 591(f) and Section 610.

A third issue arises in that defendants challenge the

constitutionality of the Act. We need not reach the con-

stitutional issue. Under the facts and circumstances of

this case, we have construed the term ‘‘expenditure’’ to

exclude a situation where, as here, a corporation (or a

labor union) expends its general funds to communicate to

the public (a) its views as to honest campaigns and elec-

tions, an issue vital to its corporate interest and to the

public; (b) its views as to a statement made by:an un-

named candidate for eleetion aimed at the community of

which it is a part; and (c) without advocating the election

of any particular person or party.

In thus construing the term ‘‘expenditure’’, we need

not decide whether the statute is overbroad in that itunduly

infringes upon the First Amendment rights of either cor-

porations or labor unions. }

Accordingly, on the basis of the record before us,

we make and enter the following

Se een a

Ea Cee?

Conciustons or Law.

1, The Court has subject-matter jurisdiction over

‘Count I of the complaint, pursuant to 28 U. S. C. § 1331.

2. The Court has personal jurisdiction over defend-

ant, Bethlehem Steel Corporation.

3. Plaintiff has failed to prove that there is a likeli-

hood of success on the merits, in that:

(a) plaintiff has no private right of action under

18 U. S. C. $610;

WV eu

Soe RAMEE A

Findings, Conclusions and Order (10/25/72) A995

(b) the expenditures made by Bethlehem Steel

Corporation in connection with the advertisement, the

speech and the folder are not ‘‘contributions or expen-

ditures’’ within the meaning of 18 U.S. C. § 610;

in connection with the advertisement, the speech and

the folder are not ‘‘expenditures”’ made for ‘‘the pur-

pose of influencing the nomination for election, or the

election of any person to Federal office’? and, hence,

are not ‘‘expenditures’’ within the meaning of 18

U. 8. C. §591(£) (1).

(d) the expenditures made by Bethlehem Steel

Corporation in connection with the advertisement, the

speech, and the folder did not constitute ‘‘active elec-

tioneering directed at the general public on behalf of

a candidate in a Federal election’’ as defined in the

legislative history to the recent amendment of 18

U. S. C. § 610; Congressional Record, November 30,

1971, H 11477, 11478;

(e) to enjoin the expenditures made by Bethle-

hem Steel Corporation in connection with the adver-

tisement, the speech, and the folder would prevent a

corporation from seeking an honest campaign and elec-

tion and refuting a statement made by an unidentified

candidate, which is adverse to its interest, thereby giv-

ing rise to grave First Amendment issues;

(f) under the facts and circumstances of this case,

18 U. S. C. § 610 must be narrowly construed to avoid

an overbroad application infringing on a corporation’s

(and labor union’s) First Amendment right to seek

an honest campaign and to refute statements on issues

of crucial concern to it and to the public, thus prevent-

ing a sa debate on such issues.

j _A56 = Findings, Conclusions and Order ( 10/25/72)

4. Plaintiff has failed to prove that injunctive relief

would not cause substantial harm to defendants.

5. Plaintiff has failed to prove that injunctive relief

would not be harmful to the public interest.

6. In 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.

A preliminary injunction will be denied.

, ORDER.

Anp Now, this 25th day of October, 1972, Ir Is OnpEREp

that plaintiff’s motion for‘a preliminary injunction wil} be,

and the same is hereby, Denmp.

/s/ E. Mac Troutman, J.

Exhibit

“ae A57

‘| say lets keep

the campaign honest

Mobilize

Stewart S. Cort, Chairman

Bethlehem Steel Corporation

“Why do I see this need? Because several months ago

we lived through a number of political primary cam-

paigns. And it ought to be clear to all of us that there

have been times when truthfulness took an awful beat-

ing. And now we have a presidential campaign ahead,

during which we can clearly see a lot more of the same.

“I'm thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community.

“Right now, look at every candidate’s declared political

programs. Analyze every issue. If you think any of

them are faulty, ill-founded, or misleading, prepare

your own answers and use those answers to set the

record straight. I’d suggest that groups with a deep

interest in good government organize programs to en-

courage responsible, honest, and truthful campaigning.

Mobilize “truth squads,” perhaps.

“One thing you can do is talk in advance with the

communications media in your area—newspaper pub-

lishers, editors, reporters, radio and television people,

and magazine publishers. Alert them to the kinds of

false statements that are likely to be made and show

them how and why those statements are false or de-

ceptive. Give them the facts. They're likely to take

a highly responsible position in reporting what the

politicians say if they're forewarned.

“And when outrageous accusations are reported in the

media, you ought to refute them immediately. You can

do it if you’re properly prepared. Plan to attend politi-

cal functions and stand up when spokesmen are off

base. Concerned citizens ought to do this; it’s nothing

more than true democracy in action.”

This Adverti

truth squads..

From a talk “SPEAK OUT FOR TRUTH” to the

Ratary Club, Jacksonville, Florida.

As an example of the careless rhetoric and ac-

cusations abeut the business community, Mr. Cort

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.” ni

His answer: “That's ar ble d d, but it

implies that we aren't already paying our ‘fair

share.’ My own company has been tagged with

that sort of accusation despite the fact that over

the past 10 years our taxes have averaged $37

million a year more than our net income. Our total

tax expense was nearly $200 million last year,

$155 million in 1970, and more than $1.7 billion for

the 10 years from 1962 through 1971.

“So please think twice before swallowing all this

baloney about large corporations not carrying their

fair share of the tax burden.”

If you would Jike a copy of Mr. Cort’s entire speech

“SPEAK OUT FOR TRUTH,” and if you would like @

folder télling-how to go about activating Truth Squads,

write: Public Affairs Dept., Bethlehem Stee! Corpora-

tion, Bethlehern, PA 18016

nt is scheduled to appeor in: Newsweek, Time, U.S. News & World Report, Business Week, Saturday Review, industry Week,

Forbes, Harvard Business Review, Editor & Publisher, and 19 Plant Town Newspapers, the Washington Post, and the Wall Street Journal.

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Notice of Appeal A59

- IN THE

UNITED STATES DISTRICT COURT

For THe Eastern District or PENNSYLVANIA.

Crvut Action No, 72-1925.

RICHARD A. ASH

STEWART S. CORT, er at.

NOTICE OF APPEAL.

—_ Notice is hereby given that plaintiff above named,

hereby appeals to the United States Court of Appeals for

the Third Circuit from the order denying plaintiff’s motion

for a preliminary injunction entered in this action on

October 27, 1972.

/s/ Cietus P. Lyman,

Cletus P. Lyman, —

1612 Latimer Street,

Philadelphia, Pa. 19103

Attorney for Plaintiff-A ppellant.

A60 Decision (1/5/73) ’

UNITED STATES COURT OF APPEALS

For THe Txuirp Crrouir

No. 72-1984

——

RICHARD A. ASH

Puaza APARTMENT Sos }

18tm & Benzamrin FRANKuIN Parkway

PurmapevpHi, Pa. 19104

On Benatr or HiMseEtr,

AND ON BEHALF OF

BETHLEHEM STEEL CORPORATION °

701 East Turp Street

BrTHLEHEM, Pennsy.vania 18016, .

Appellant

Vv. :

STEWART S. CORT, Cramman

LEWIS. W. FOY, Preswent

EDWARD D. BICKFORD, Vice Presment

BERNARD D. BROEKER, Vice Presment

ALBERT M. REED, Vice Present

C. THOMPSON STOTT, Vice Preswent

IVOR D. SIMS, Vice Present

CROWDUS BAKER

JESS H. DAVIS

THOMAS S. GATES,

Decision (1/5/73) A61

ROBERT B. HOBBS

GEORGE P. JENKINS

Auu Berne DrrecTors oF

BETHLEHEM STEEL CORPORTATION,

Defendants

AND |

BETHLEHEM STEEL CORPORATION

701 East Tuirp STREET

Beruuenem, Pexnsyivania 18016,

? Nominal Defendant

(D. C. Civil Action No. 72-1925)

‘

t ‘

AppgaL From THE Unirep Srarzs District Court FOR THE

Eastern District oF PENNSYLVANIA

Argued December 15, 1972

Before Serrz, Chief Judge, and ALDISERT and

Rosenn, Circuit Judges

OPINION OF THE COURT

(Filed January 5, 1973)

CLETUS P. LYMAN, Esq.

Phila., Pa.

Attorney for Appellant

EDWIN P. ROME, Esq.

JEROME R. RICHTER, Esq.

WILLIAM H. ROBERTS, Esq.

Phila. Pa.

Attorneys for Appellees

A62 Decision (1/5/73)

Per Curiam:

This is an appeal from a denial of a request for pre-

liminary relief seeking to enjoin Bethlehem Steel from

furnishing funds for the publication and dissemination of

copies of a speech made by the corporation’s president.

Appellant alleged that this practice offended 18 U. S. C.

§§ 591, 610, governing the conduct of federal elections and

political activities, We affirm the denial of the request for

a preliminary injunction. Our holding is narrowly limited.

We affirm solely because we view as not clearly erroneous

the district court’s finding that appellant would not be ir-

reparable harmed by the denial of his request.

Although the court reached other legal considerations

which facially would seem to preclude appellant from pro-

ceeding to final hearing, we were assured at oral argument

by counsel for appellees that he considered those concln-

sions to have been preliminary only and limited to the con-

text of the request for preliminary relief. He conceded that

appellant would be free to present anew his original con-

tentions in the district court as the case proceeds to final

adjudication. We therefore conclude that appellant is not

foreclosed from reasserting at final hearing his contentions

of standing and statutory construction of 18 U. S. C. §§ 591,

610 and, thus, do not meet these questions nor the issue

of mootness.

The judgment of the district court will be affirmed.

“SONOS HUMBERT AE

Judgment (1/5/73) A63 ©.

UNITED STATES COURT OF APPEALS

Tor THE THirp Circuit

————

No. 72-1984.

i RICHARD A. ASH

: Puaza A’ARTMENT

2 18TH & FENJAMIN FranKLIN Parkway

4 PurmaperHi, Pa. 19104

q On Benaur oF HimseELF,

AND ON BEXALF OF

BETHISHEM STEEL CORPORATION

701 Eas? Top STREET

BeruizrEM, PENNSYLVANIA 18016,

Appellant,

STEW/RT S. CORT, Cuarrman

LEWIS W. FOY, Present

EDWAtD D. BICKFORD, Vict PRESIDENT

BERN/RD D. BROEKER, Vict PRESIDENT

i ALBEE! M. REED, Vice PRESIDENT

4 C. THCMPSON STOTT, Vice Present

. IVOR ?. SIMS, Vice Present

CROW)US BAKER

é JESS 1. DAVIS

: THOMS S. GATES

A64 Judgment (1/5/73)

ROBERT B. HOBBS

GEORGE P. JENKINS ~

Aut Berne Directors oF

BETHLEHEM STEEL CORPORTATION,

Defendants

AND

BETHLEHEM STEEL CORPORATION

701 East Tumep Street

BETHLEHEM, Pennsytvania 18016,

Nominal Defendant

(D. C. Civil No. 72-1925)

On AppgeaL From tHe Untirep States District Court

FOR Ti.e Eastern District of PENNSYLVANIA

Present: Srrrz, Chief Judge and Aupisert and

Rosenn, Circuit Judges

JUDGMENT.

This cause came on to be heard on the record from the

United States District Court for the Eastern District of

Pennsylvania and was argued by counsel.

On consideration whereof, it is now here ordered ina

adjudged by this Court that the judgment of the said Dis-

trict Court, filed October 27, 1972, be, and the same is scare J

affirmed, with costs taxed against appellant.

- ~~.

ATTEST:

/s/ Tuomas F. Quinn,

Clerk.

. January 5, 1973

EO Nae Ney ee in re Pe ey

Motion for Security for Expenses A65

IN THE

UNITED STATES DISTRICT COURT

For THe Eastern District oF PENNSYLVANIA.

— —

Crvwv Action No. 72-1925.

RICHARD A. ASH

Os-Bauar oF HimsEL¥F

AND ON BEHALF OF

BETHLEHEM STEEL CORPORATION,

Plaintiff,

STEWART S. CORT, er 4t.,

Defendants.

MOTION FOR SECURITY FOR EXPENSES.

Defendants, Stewart S. Cort, Lewis W. Foy, Edward D.)

Bickford, Bernard D. Broeker, Albert M. Reed, C. Thomp-

son Stott, Ivor D. Sims, Crowdus Baker, Jess H. Davis,

Thomas S. Gates, Robert B. Hobbs, George P. Jenkins,

and Bethlehem Steel Corporation (‘‘Bethlehem’’) by their

attorneys, Blank, Rome, Klaus & Comisky, respectfully

move your Honorable Court pursuant to Act of May 5,

1933, P. L. 364, Art. V, § 516, added Act of August 27, 1963,

P. L. 1355, §1, as amended Act of July 20, 1968, P. L. —,

No. 216 § 32 (15 P. S. § 1516, Pennsylvania Business Cor-

poration Law, §516B), for an Order requiring plaintiff to

post security for expenses in the above captioned matter.

The following reasons are advanced in support of this

Motion: .

A66 Motion for Security for Expenses

1. This is a suit brought to enforce secondary rights

on the part of a stockholder against the directors of Beth-

lehem and Bethlehem.

2. Plaintiff is a holder of 50 shares of common stock of

Bethlehem, which is less than five (5) percent of the out-

standing shares of such common stock. Bethlehem had on

January 5, 1973, about 44,468,446 shares of common stock

outstanding, and the closing value of a share of common

stock on January 5, 1973 was $29%.

3. Each individual defendant is a director of Bethlehem

and at all times alleged in the Complaint, acted in good

faith, in a manner he reasonably believed to be in the best -

interests of Bethlehem, and his conduct was not unlawfuw!.

Furthermore, in so acting, each defendant was neither negli-

gent nor guilty of misconduct in performance of his duties

to Bethlehem. Bethlehem and the directors deny any un-

lawful, improper or wrongful acts as alleged in the

Complaint.

4, Plaintiff has made no effort to verify the truth of

> the material allegations made in his Complaint, and he has

no reasonable belief in the truth thereof. This law suit is of

a frivolous and harassing nature, in which plaintiff has no

real likelihood of success.

Wuererore, defendants respectfully move Your Honor-

able Court to enter an Order requiring plaintiff to post

bond as security for reasonable expenses in the amount of

$100,000.00. _

Buank, Roms, Kuiaus & Comisxy,

By: /s/ Epwtn P. Rome,

Edwin P. Rome,

JEROME R. RicHTeER,

Attorneys for Defendants.

Pear, Seca einnas Te Ps Oe sepa Th ae pare

OT al ee:

Order (1/31/73) A67

UNITED STATES COURT OF APPEALS

For tHe Tuiep Cricuir.

No. 72-1984.

RICHARD A. ASH, Etc.

Appellant,

Vv.

STEWART S. CORT, erc., ET AL.

ORDER SUR PETITION FOR REHEARING.

Present: Serrz, Chief Judge, and Van Dusen, ALDISERT,

Apams, Giszons, Rosenn, and Hunter, Circutt Judges.

The petition for rehearing filed by Appellant in the

above entitled case having been submitted to the judges

who participated in the decision of this court and to all the

other available circuit judges of the circuit in regular active

service, and no judge who concurred in the decision having

asked for rehearing, and a majority of the circuit judges

of the circuit in regular active service not having voted for

rehearing by the court in banc, the petition for rehearing

is denied.

‘By THE COURT,

/s/ ALDISERT,

Judge.

3 Dated: January 31, 1973

A68 Order (3/7/73)

IN THE

UNITED STATES DISTRICT COURT .

For THe Eastern District or PENNSYLVANIA.

Crvi. Action No. 72-1925.

RICHARD A. ASH,

On Renatr oF HIMSELF AND ON BEHALF OF

BETHLEHEM STEEL CORPORATION

STEWART S. CORT, ET AL.

ORDER.

TrouTMaN, J. ‘

q Anpv Now, this 7th day of March, 1973, upon considera-

tion. of this written motion and briefs submitted by the

parties, Ir Is Orprrep that defendants’ motion for security

for expenses as it relates.to Count I of plaintiff’s complaint

is Denrep. As to Count II, Ir Is FurrHer Orperep that the

plaintiff post a bond with the Clerk of this Court in the

amount of $35,000.00 as security for expenses pursuant to

the provisions of Section 516(b) of the Pennsylvania Busi-

ness Corporation Act, 15 P. S. $1516 and that such bond

be posted within ten (10) days of the date of this order.

Construing Section V of plaintiff’s preliminary memoran-

dum as a motion for leave to amend the complaint, Ir Is

FurtHER Oxperep that such motion is Grantep. Ir Is Fur-

THER ORDERED that defendants’ objections to plaintiff’s

interrogatories and request. for documents as they relate

to this motion are Sustarnep.

/s/ EB. Mac Trourmay, J.

pits 5

hh PILES Li

eg EER RING ae ASE i REL LBA SAA ER BT IGY NRESTN

First Amended Complaint A69

IN THE

UNITED STATES DISTRICT COURT

For tHe Eastern District oF PENNSYLVANIA.

Civ Action No, 72-1925.

Jury Tria DEMANDED.

RICHARD A. ASH

Piaza APARTMENT

18rH & BensaMIN FRANKLIN PARKWAY

PurLapetpuHia, Pa. 19104

On Bena or HiMsELr,

AND ON BEHALF OF

BETHLEHEM STEEL CORPORATION

701 East Turrp STREET

BretHLeHEM, Pennsytvania 18016,

Plaintiff,

Vv.

STEWART S. CORT, CHamman

’ LEWIS W. FOY, Presment

EDWARD D. BICKFORD, Vice Present

BERNARD D. BROEKER, Vice Presment

ALBERT M. REED, Vice Present

C. THOMPSON STOTT, Vice Present

IVOR D. SIMS, Vice Present

CROWDUS BAKER

JESS H. DAVIS

THOMAS S. GATES,

A70 First Amended Complaint

ROBERT B. HOBBS . ;

GEORGE P. JENKINS,

Aut Berne Directors oF :

BETHLEHEM STEEL CORPORTATION, i

Defendants

AND

BETHLEHEM STEEL CORPORATION

701 East Tuirp Street i

BETHLEHEM, PennsyLvania 18016,

; Nominal Defendant

FIRST AMENDED COMPLAINT.

1. Plaintiff Richard Ash is an individual residing at

the Plaza Apartment, 18th & Benjamin Franklin Parkway,

Philadelphia, Pennsylvania.

2. Nominal defendant, Bethlehem Steel Corporation

(Bethlehem Steel) is a Delaware corporation with principal

office located at 701 East Third Street, Bethlehem, Penn- “

sylvania, engaged, inter alia, in the business of steel pro-

duction, distribution and sale.

3. Bethlehem Steel is the second largest United States

steel producer with annual gross sales in excess of $3.0

billion annually. It maintains plants and offices for the

carrying out of its business throughout the United States,

including the Eastern District of Pennsylvania.

4. Defendants Stewart S. Cort, Lewis W. Foy, Edward

D. Bickford, Bernard D. Broeker, Albert M. Reed, Ivor D.

Sims, C. Thompson Stott, Crowdus Baker, Jess H. Davis, 4

Thomas S. Gates, Robert B. Hobbs and George P. Jenkins,

are individuals residing within the United States, who

pes:

First Amended Complaint A71

comprise the Board of Directors of Bethlehem Steel, Cort

being the Chairman of said Board. Foy, Bickford, Broeker,

Reed, Sims and Stott serve additionally as top echelon ex-

ecutives of said company; Foy as its President; and the

others as Executive Vice Presidents.

5. By virtue of their said positions with Bethlehem

Steel, defendants control the policy making of the corpora-

tion, its implementation of such policies, and the disburse-

ment of corporate funds pursuant to and in furtherance of

such policies. .

6. Bethlehem Steel is a publicly held corporation whose

stock is traded and listed on the New York Stock Exchange.

Its stock is widely distributed to in excess of 200,000

holders, a substantial number of whom live within the

United States and within the Eastern District of Penn-

sylvania.

7. Plaintiff is, and was at all times herein material, the

owner of 50 shares of Bethlehem Steel stock. He is, in ad-

dition, a citizen of the United States, ‘registered and quali-

fied to vote in federal and state elections, including the

1972 United States presidential election. —

8. Plaintiff brings this action in an individual capacity

as a shareholder, a United States citizen and a qualified «

member of the United States electorate as aforesaid and

derivatively on behalf of Bethlehem Steel and alleges that

he is well able to fairly, ably and effectively represent the

rights and interests of said corporation.

9. No demand has been made upon the Directors of

Bethlehem Steel to seek similar redress directly, because.

said Directors are involved in and responsible for the

wrongdoing out of which plaintiff’s suit arises.

A72 First Amended Complaint

10. No request for concerted action has been made to

plaintiff’s fellow shareholders in Bethlehem Steel, because

they are too numerous and too widely scattered to make

such request practicable.

11. This action is not a collusive one to confer juris-

diction upon a court of the United States which it would not |

otherwise have.

12. This Complaint arises out of alleged violation by

defendants of the criminal statutes of the United States ©

governing elections and political activities, commonly known

as the Federal Corrupt Practices Act, specifically Title 18, -

Section 610, U. S. C. A. of said Act, and the private remedy |

for redress of grievances implied under said Act. Juris-

diction is involved under Title 28, Section 1331, U. 8. C. A.,

the amount in controversy exceeding the sum of $10,000,

exclusive of interest and costs.

13. At some time in 1971 or 1972, defendants entered

into a plan involving the utilization of Bethlehem Steel’s

resources, including the expenditure of its funds, in con-

nection with the 1972 United States presidential election.

14. The ultimate purpose of said plan was to influence

the United States electorate to help bring about a Re-

. publican Party victory in said election. This purpose was

solely in furtherance of the individual interests and beliefs

of defendants and was in violation of state and federal law,

and in derogation of the rights of the United States public,

and of the approximate one half of the shareholders of

Bethlehem Steel that are registered members of the Demo-

cratic political party.

15. Thereafter, in furtherance of said plan and pur-

pose, defendants caused corporate resources to be utilized,

including the expenditure of substantial funds in connection

wnt

with said political campaign, including, inter alia, their

causing to be prepared and disseminated at corporate ex-

pense, an advertisement entitled ‘‘I Say Ler’s Keer tHe

Camparcn Honest. Mosiuze ‘Truru Squaps’. . .”’, at-

tributed to defendant Cort. (A copy of said advertisement

is attached hereto and made part hereof as Exhibit ‘‘A’’.)

First Amended Complaint A73

16. Said advertisement was communicated to the

‘ United States’ electorate as aforesaid, inter alia, by inser-

‘ tion in various magazines of national circulation, including

Newsweek, Trmz, U. S. News & Wortp Report, Bustness

Week, Saturpay Review, Inpustry Week, Forses, Harvarp

Bystness Review, Epitor & Pusuisuer, and in various local

newspapers, and by a direct mailing, to Bethlehem Steel

shareholders.

17. The aforesaid actions by defendants have been and

are in violation of said Federal Election nw, which states

inter alia:

“Tt is unlawful for . . . any corporation what-

ever . . . to make a contribution or expenditure in con-

nection with any election at which Presidential and

Vice Presidential electors or a Senator or Representa-

tive in, or a Delegate or Resident Commissioner to

Congress are to be voted for... .’’ Title 18, Sec. 610,

U.S. C. A.

18. The said actions by defendants are, a fortiori, un-

lawful in that they involve the utilization of corporate

resources for partisan political purposes in connection with

said presidential election, pursuant to defendants’ plan and

purposes.

19. The said advertisement is blatantly partisan on

its face, in that it in essence calls for the mobilization of

‘‘truth squads’’ to keep the campaign honest, on the basis

of the following factors extracted therefrom:

AT74 First Amended Complaint

‘‘Why do I see this need? Because several months

ago we lived through a number of political primary

campaigns. And it ought to be clear to all of us that

there have been times when truthfulness took an awful

beating. And now we have a presidential campaign

ahead, during which we can clearly see a lot mere of

the same. ~

“Dm thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community. ‘

* * *

‘*As an example of the careless rhetoric and accusa-

tions about the business community, Mr. Cort quoted

the following statement made ly a political candi idate :

‘The time has come for a tax system that says ns big

business—you must pay your fair share.’’’ (Exhibit

‘A??) .

All of which factors can only reasonably be imputed to

activities of Democratic candidates and programs and

policies that are identified by the public with the Demo-

cratic party and its current candidate for the presidency.

20. Defendants have caused an unlawful expenditure

by Bethlehem Steel in connection with the 1972 Presidential

Election Campaign, as aforesaid, of corporate funds and

other resources with a total value in excess of $500,000.

21. Defendants. presently intend to cause Bethlehem

Steel to make further similar and unlawful expenditures

of corporate -resources in connection with future federal

elections.

Wuenerone, plaintiff respectfully requests that this

Honorable Court enter:

First Amended Complaint AT5

(A) Declaratory judgment against defendants jointly

and severally finding their conduct as alleged unlawful.

(B) An Order temporarily and permanently restrain-

ing and enjoining defendants from any further expendi-

tures or contributions in connection with any federal

election.

and in favor of Bethlehem Steel in an amount in excess

of $500,000 compensatory damages.

(D) Judgment against defendants jointly and severally

and in favor of plaintiff corporation for punitive damages

commensurate with their wrongdoing.

(E) Judgment against defendants jointly and severally

and in favor of plaintiff for costs of suit, including reason-

able attorneys’ fees.

(F) Such other and further and different relief as

appears proper under the circumstances.

Cuietus P. Lyman,

1512 Latimer Street,

Philadelphia 19103

Attorney for Plaintiff.

A76 First Amended Complaint

CoMMONWEALTH OF PENNSYLVANIA |, .

‘County oF PHILADELPHIA

\ Ricuarp A. Asu, being duly sworn according to law,

, deposes and says that he is the plaintiff in the within

complaint and is familiar with the facts set forth therein

which are true and correct to the best of his knowledge,

information and belief.

/s/ Ricuarp A. AsH

“Richard A. Ash.

Sworn to and subscribed to before me this 19th day

of March, 1973.

/s/ Nancy H. Benoman

Nancy H. Bergman, Notary Public

Philadelphia, Philadelphia County

My Commission expires May 6, 1976

Member, Pennsylvania Association of Notaries

| say lets keep

+ ai Rite. Mavi WEL

a= RN chen He

REDE WHIP CO OT 4 ee ER

Peete

Tee

Wilkes RETT

Exhibit

ate A77

the Campaign honest

Mobilize truth squads.

Stewart S. Cort, Chairman

Bethlehem Steel Corporation

“Why do I see this need? Because several months ago

we lived through a number of political primary cam-

paigns. And it ought to be clear to all of us that there

have been times when truthfulness tock an awful beat-

ing. And now we have a presidential campaign ahead,

during which we can clearly see a lot more of the’same.

“I’m thinking of the careless rhetoric and accusations

that are being thrown around these days—their main

target being the business community.

“Right now, look at every candidate's declared political

programs. Analyze every issue. If you think any of

them are faulty, ill-founded, or misleading, prepare

your own answers and use those answers to set the

record straight. I’d suggest that groups with a deep

interest in good government organize programs to en-

courage responsible, honest, and truthful campaigning.

Mobilize “truth squads,” perhaps.

“One thing you can do is talk in advance with the

communications media in your area—newspaper pub-

lishers, editors, reporters, radio and television people,

and magazine publishers. Alert them to the kinds of

false statements that are likely to be made and show

them how and why those statements are false or de-

ceptive. Give them the facts. They’re likely to take

a highly responsible position in reporting what the

politicians say if they’re forewarned.

“And when outrageous accusations are reported in the

media, you ought to refute them immediately. You can

do it if you’re properly prepared. Plan to attend politi-

cal functions and stand up when spokesmen are off

base. Concerned citizens ought to do this; it’s nothing

more than true demo-racy in action.”

From a talk “SPEAK OUT FOR TRUTH” to the

Rotary Club, Jacksonville, Florida.

As an example of the careless rhetoric and ac-

cusations about the business community, Mr. Cort

quoted the following statement made by a political

candidate: “The tinze has come for a tax system

that says to big business—-you must pay your fair

share.”

His answer: “That's a reasonable demand, but it

implies that we aren't already paying our ‘fair

share.” My own company has been tagged with

that sort of accusation despite the fact. that over

the past 10 years our taxes have averaged $37

million a year more than our net income. Our total

tax expense was nearly $200 million last year,

$155 million in 1970, and more than $1.7 billion for

the 10 years from 1962 through 1971.

“So please think twice before swallowing all this

baloney about large corporations not carrying their

fair share of the tax burden.”

if you would like a copy of Mr. Cort’s entire speech

“SPEAK OUT FOR TRUTH,” and if you would like a

folder telling how to go about activating Truth Squads.

write’ Public Affairs Dept. Bethlehem Steel Corpora-

tion, Bethlehern, PA 18016

This Advertisement is scheduled to appecr in: Newsweek, Time, U.S. News & World Report, Business Week, Saturday Review, industry Week,

Forbes, Harvard Business Review, Editor & Publisher, and 19 Plant Town Newspopers, the Washington Post, and the Woll Street Journol.

MAI RL LPR EE RES LIL IEICE LP SSELLLITE EEL LINEN LIEN DOES

Motion for Summary Judgment A79

IN THE :

UNITED STATES DISTRICT COURT

For THE Eastern District or PENNSYLVANIA.

Crviz Action No. 72-1925.

Morton.

RICHARD A. ASH, ;

Plaintiff,

STEWART S. CORT, er at.,

Defendants.

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT.

Defendants move the Court pursuant to Rule 56 of the

Federal Rules of Civil Procedure for summary judgment in

the defendants’ favor dismissing the claim alleged in Count

I of the Complaint on the ground that there is no genuine

issue as to any material fact and that the defendants are

entitled to a judgment as a matter of law, and dismissing

the claim alleged in Count II of the Complaint on the ground

that, defendants being entitled to judgment as to Count I,

the Court lacks jurisdiction over the subject matter of the

pendent claim alleged in Count II.

Of Counsel: /s/ Epwty P. Rog,

Buank, Romg, Kuiavus Edwin P. Rome,

& Comisry, JEROME R. RicuTEs,

1100 Four Penn Center Wu H. Rosesrrs,

Plaza, Attorneys for Defendants.

Philadelphia, Pennsylvania

19103

A80 Index to Memorandum of Law

IN THE .

UNITED STATES DISTRICT COURT

For THE Hastern District or PENNSYLVANIA.

Crviz Action No. 72-1925.

RICHARD A. ASH,

Plaintiff,

STEWART S. CORT, er at.,

. Defendants.

MEMORANDUM OF LAW IN SUPPORT OF

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT.

Of Counsel: ”

Buank, Rome, Kiavs Epwin P. Romg,

& Comisky, JEROME R. RicHTER,

Four Penn Center Plaza, Wu H. Roszrts,

Philadelphia, Pennsylvania. Attorneys for Defendants.

19103

ante

SP Se

Index to Memorandum of Law : A81

INDEX.

| "Page

I. SUMMARY OF PROCEDURAL ae 1

II. SUMMARY OF THE FACTS ...........00 eee eeeeeeeeeees 4

TE. PONY osseous ores ae e449 ade 04ey tdteen ees 6

A. Standards for Grant of Summary Judgment ......... 6

B. There Is No Private Right of Action Under 18

Rie ee iy, PU oo oe ge xe seuensce chee enesed ee exrnss 7

C. Title 18 U. S. C. §610 Does Not Apply to the Case

St TE nak eeekskseadsriseennan Wereskdeeeses aes 14

D. If Applied to the Cas: at Bar, 18 U. S. C. §610 Would

Be Unconstitutional .................2eeeeeeeeees 35

1. If applied, 18 U. S. C. §610 would abridge the

freedoms of speech and press, guaranteed by the

First Amendment of the United States Constitution 38

2. If applied, 18 U. S. C. §610 would abridge the

right to petition the Government for redress of

grievances, guaranteed by the First Amendment

_ of the United States Constitution ......../...... 47

3. If applied, 18 U. S. C. §610 would abridge the

freedom of association, guaranteed by the First

Amendment of the United States Constitution ... 48

4. I£€ applied, 18 U. S. C. §610 would create an arbi-

trary, unreasonable and invidious discrimination

against defendants in the exercise of their First

Amendment rights and thereby deny them equal

protection of the laws guaranteed by the Fifth

Amendment of the United States Constitution .. 49

5. Title 18 U. S. C. § 610 is impermissibly vague and

uncertain and, if applied, would deprive defendants

of due process of law, guaranteed by the Fifth

Amendment of the United States Constitution.... 51

E. The State Law Claim Asserted in Count Two of the

Complaint Should Be Dismissed for Lack of Jurisdic-

tion Over the Subject Matter ..................... 52

EV. COMNGORIIN 6 oi ce vase eisvewecvnescepsaapdinsespuce 55

A82 Motion for Evidentiary Hearing

IN THE

UNITED STATES DISTRICT COURT

For THE Eastern District oF PENNSYLVANIA.

Crviz Action No. 72-1925.

Jury Tria, DEMANDED.

RICHARD A. ASH,

. Plaintiff,

STEWART S. CORT zr at,

Defendants.

MOTION FOR AN EVIDENTIARY HEARING ON THE

QUESTION OF PLAINTIFF'S STANDING AND FOR

CONTINUATION OF DEFENDANTS’ MOTION FOR

, SUMMARY JUDGMENT.

Plaintiff by his attorney hereby moves the Court for

an evidentiary hearing on’the question of plaintiff’s stand-

ing and for continuation of defendants’ motion for sum-

mary judgment. More particularly, plaintiff requests:

1. That a jury be empaneled to try all factual issues

material to plaintiff’s standing;

2. That plaintiff be given the opportunity to subpoena

witnesses in his behaif ;

3. That defendants’ motion for summary judgment be

continued until such time as the Court has ruled on plain-

tiff’s standing.

Motion for Evidentiary Hearing A83

In support of plaintiff’s motion, plaintiff asserts as

follows:

1, That standing is the principal question raised by

defendants in their motion for summary judgment;

2. That this Court has previously observed that the

question of standing is a factual question in its discussion

of plaintiff’s motion for preliminary injunction [entered

“October: 30,1972].

3. That plaintiff has not had an opportunity to develop

any facts of record related to the issue of standing and that

evidence material to this issue is not in the present posses-

sion of plaintiff but may be secured only by testimony of

witnesses who must be produced by compulsory process of

this Court; and,

4. That plaintiff has at all times reserved his right to

trial by jury of all material facts by endorsing ‘‘ Jury Tru.

Demanvep’’ on his Complaint and Amended Complaint.

Wuererorz, plaintiff requests that his motion be

granted and that an evidentiary hearing be held and that

defendants’ motion for summary judgment be continued

pending a ruling on plaintiff’s standing.

/s/ Cuzrus P. Lyman,

Cletus P. Lyman,

1612 Latimer Street,

Philadelphia. 19103

Attorney for Plaintiff. —

A84 Affidavit in Support of Motion

: IN THE

UNITED STATES DISTRICT COURT

For THe Eastern District or PENNSYLVANIA

Civiz Action No. 72-1925.

Jury TRIAL Demaxpe,

RICHARD A. ASH,

poe . Plaintiff,

iv. {at

STEWART S. CORT er at,

Defendants.

AFFIDAVIT.

Ricuarp A. Asn, being duly sworn, deposes and says

as follows:

1. That he is plaintiff in the above action and that he

is a member of the bar of this Court;

2. That he makes this affidavit in support of plaintiff’s

motion for an evidentiary hearing on the question of plain-

tiff’s standing and for continuation of defendants’ motion

for summary judgment.

3. That he has investigated facts material to the ques-

tion of plaintiff’s standing and that he has established the

_ following factual conclusions:

a, the Justice Department of the United States

‘has historically failed to enforce the election laws of the

ee ee is

Affidavit in Support of Motion _ A85

United States including Title 18 U. S. C. Section 610 and

‘its predecessor statutes ;

b. the Justice Department was intentionally made

subservient to the reelection goals of the Republican Nixon

administration so as to render it inadequate to enforce the

election laws including Title 18 Section 610 in the 1972

presidential election ;

ce. the Justice Department lacks the requisite staff

and resources to effectively enforce the election laws of the

United States including Title 18 Section 610.

d. the General Accounting Office assumes no re-

sponsibility for investigation of violations or enforcement

of Title 18 U. 8. C. Section 610.

4. That he has located through documentary research

and personal interview in excess of ten witnesses in the

United States who have testimony supporting the above

factual conclusions whom he will produce by compulsory

process of this Court if an evidentiary hearing is granted.

A partial list of such witnesses is attached hereto as

Exhibit A.

/s/ Ricuarp A. Asx,

Richard A. Ash.

Sworn to and subscribed before me tis 26 day of June,

1973.

'/s/ Nancy H. Brroman

Nancy H. Bergman Notary Public

Philadelphia, Philadelphia County

My Commission Expires May 6, 1976

Member, Pennsylvania Association of Notaries

f .

Exhibit A to Affidavit

‘Exhibit A.

JOHN W. GARDNER

PHILIP H. HUGHES

JAMES H. DUFFY

JOHN W. DEAN, III

JEB STUART MacGRUDER

JOHN MITCHELL

RICHARD KLEINDIENST

JOHN J. MARDIAN

ROBERT HIGGINS

ELMER STAATS

HENRY E. PETERSON

HOWARD HUNT

JAMES McCORD

vy Lal AMO URES reg) + 8

Order (7/11/73) A87

IN THE

UNITED STATES DISTRICT COURT

For tHe Eastern District or PENNSYLVANIA.

Civiz Action No. 72-1925.

RICHARD A. ASH

STEWART S. CORT er at.

ORDER.

AnD Now, this 11th day of July, 1973, upon a finding

that the issue whether plaintiff has an implied right to

prosecute a cause of action under 18 U. S. C. § 610 is a

question of law to be determined by the Court based upon,

mter alia, the language, legislative history and purpose of

the Act, Ir Is Orprrep that plaintiff’s motion for an evi-

dentiary hearing and for continuation of defendants’ ino-

tion for summary judgment is Deniep. In addition, upon

consideration of the entire record, oral argument and briefs

submitted by the parties and upon a finding (1) that no

legal basis has been presented by the plaintiff to justify the

relief sought, and (2) that no genuine issues of material

facts exist, Ir Is Furrner Orperep that defendanis’ motion

for summary judgment is GranTep.

/s/ E. Mac Troutman, J.

A88 Notice of Appeal

IN THE

UNITED STATES DISTRICT COURT |

For tHe Eastern District oF PENNSYLVANIA.

f onsen

Crviz Action No. 72-1925.

Jury Tria, DEMANDED.

RICHARD A. ASH,

Plaintiff

Vv.

STEWART 8. CORT er at,

Defendants.

NOTICE OF APPEAL.

Notice is hereby given that plaintiff Richard A. Ash

hereby appeals to the United States Court of Appeals for

the Third Circuit from the order of the above Court deny-

ing plaintiff’s motion for an evidentiary hearing and for

continuation of defendants’ motion for summary judgment

and granting defendants’ motion for summary judgment,

entered July 11, 1973.

/s/ Cuietus P. Lyman,

Cletus P. Lyman,

1612 Latimer Street,

Philadelphia. 19103

_ Attorney for Plaintiff.

Appellant’s Designation A89

IN THE

UNITED STATES COURT OF APPEALS

For tHe Tuirp Circurr

No. 73-1739.

RICHARD A. ASH,

Appellants

Vv.

STEWART S. CORT, er at.,

Appellees,

DESIGNATION OF PARTS OF RECORD TO BE

INCLUDED IN APPENDIX AND STATEMENT

OF ISSUES TO BE PRESENTED

FOR REVIEW.

To APPELLEES IN THE ABovE CAPTIONED Action :

Appellant hereby designates parts of the record to be

included in the appendix and states the issues to be pre-

sented for review in the above captioned appeal. If you

deem it necessary to direct the particular attention of the

Court to parts of the record not designated herein, you

should serve on appellant a designation of these parts

within ten days of service hereof pursuant to Fed. R. App.

P. 30(b).

Parts or Recorp to Bre INcLupEp IN APPENDIX,

1. Dockec entries

2. Amended Complaint

A90

Appellant’s Designation

Proposed answer to Amended Complaint.

Motion of Plaintiff for Preliminary Injunction

5. Amendment to Plaintiff’s Motion for Preliminary

12.

13.

14.

Injunction

Decision of Court below denying plaintiff’s Motion

for a Preliminary Injunction, Order

Stipulation of Agreed Upon Facts

Notice of Appeal from Denial of Preliminary In-

junction .

Opinion of Court of Appeals affirming denial of

preliminary injunction

Defendants’ Motion for Summary Judgment

. Two-page index to Memorandum of Law in Sup-

port of Defendants’ Motion for Summary Judg-

ment

Plaintiff’s Motion for an Evidentiary Hearing and

for Continuation of Defendants’ Motion for Sum-

mary Judgment, accompanying affidavit of plaintiff

Order of court below of July 11, 1973, denying

plaintiff’s motion for an evidentiary hearing ete.

and granting defendants’ motion for summary

judgment

Notice of appeal from order (#13 above).

Issugs To Be PRESENTED FoR REVIEW.

1. Does a party who is both a shareholder of a cor-

poration and a member of the electorate qualified to vote in

a federal election have standing to seek injunctive relief,

declaratory relief or damages on behalf of the corporation

based on a complaint against the directors of the corpora-

ihe Sculls MP cdl set cz WBALLA Mistress

Appellant’s Designation A91

tion alleging that directors spent corporate funds in viola-

tion of Title 18 U. S. C. Section 6102

2. Could the court have concluded that no genuine

issues of material facts exist in light of the broad allega-

tions of the amended complaint and the limited scope of the

record before the court?

3. Is the expenditure of corporate funds for the pro-

mulgation of advertising in the manner and of the nature

complained of violative of Title 18 U. S. C. Section 610?

4. Is Title 18 U. S. C. Section 610 as sought to be en-

forced violative of the United States Constitution, Amend-

ment I?

Dated: September 6, 1973

/s/ Cuetus P. Lyman,

Cletus P. Lyman,

1612 Latimer Street,

Philadelphia. 19103

Attorney for Plaintiff-Appellant.

To:

Edwin P. Rome, Esq.

Four Penn Center Plaza

Philadelphia. 19104

A92 Decision (4/16/74)

UNITED STATES COURT OF APPEALS

For tHe Turep Circuit

No. 73-1739

RICHARD A. ASH, on Behalf of Himself, and on Behalf

of BETHLEHEM STEEL CORPORATION,

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)

AppreaL From THE Unrtep Sratrs District Court FoR THE

Eastern District or PENNSYLVANIA

Argued January 17, 1974

Before Serrz, Chief Judge, Hastm and ALprsert,

Circuit Judges.

Dey tet ee ee eee ae se

Gy Fe Lt yd a CREE Oe RO ey ae sae

Decision (4/16/74) A93

Cletus P. Lyman

Attorney for Appellant

1612 Latimer Street

Philadelphia, Pennsylvania

Edwin P. Rome

Jerome R. Richter

William H. Roberts

Attorneys for Appellees

Of Counsel

Blank, Rome, Klaus & Comisky

Four Penn Center Plaza

Philadelphia, Pennsylvania 19103

OPINION OF THE COURT

(Filed April 16, 1974)

Serrz, Chief Judge.

Plaintiff, a stockholder in Bethlehem Steel Corporation

and registered to vote in federal eléctions, appeals from an

order of the District Court for the Eastern District of

Pennsylvania denying his request for an evidentiary hear-

ing and granting defendants’ motion for summary judg-

ment. 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. Plain-

tiff asserts that the corporate expenditures, for an ad-

vertisement and a pamphlet, violated a federal prohibition

as amended (Supp. II 1972). Plaintiff, seeking an in-

junction and damages, invokes federal jurisdiction over this

claim under 28 U.S. C. § 1331 (1970), making the requisite

jurisdictional allegations.

A944 Decision (4/16/74)

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 pre-

liminary 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.

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 pro-

ceedings. Jd. at 812. As originaliy 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.

a a a i

;

Decision (4/16/74) A95

Controversies concerning elections often have pre-

sented mootness problems. See, e.g., Hall v. Beals, 396

U. S. 45 (1969); Moore v. Ogilvie, 394 U. S. 814 (1969).

These problems arise since election controversies almost

always are spawned shortly before the election, seek

prospective relief directed to the election, and reach ap-

pellate 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 de-

fendants’ 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 dis-

trict 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."_ Even if plaintiff has no live claim for injunctive

1. Plaintiff in his amended complaint has dropped the allega-

tions contained in the state law count of his original complaint. One

allegation from the federal count of the original complaint and carried

over verbatim in the amended version, however, declares, without

elaboration that defendants violated both state and federal law. De-

fendants, presuming that plaintiff thus had not abandoned his state

claim, moved for summary judgment on the federal claim and dis-

A9G Decision (4/16/74)

relief, the dispute over damages renders this controversy

justiciable. See Powell v. McCormack, 395 U. 8S. 486, 495-

500 (1969). We need not decide whether plaintiff’s claim

would be moot if he did not seek damages as well as an

injunction.”

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 (1968); Baker v.

Carr, 397 U. S. 186, 204 (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, in-

juries, 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. 8. 669,

685-89 (1973), and cases cited id. at 689, n. 15.

1, (Cont’d.)

missal of plaintiff's pendent state claim for want of jurisdiction fol-

lowing judgment for defendants on the only federal matter. The dis-

' trict court does not mention plaintiff's state claim, but merely grants

| defendants’ motion. We assume that if plaintiff did not abandon

his state law claim, the district court’s order dismissed that claim for

want of federal jurisdiction but do not reach the dismissal’s propriety.

2. Since the controversy between plaintiff and defendants is not

moot, the viability of plaintiff's claim for injunctive relief must be

determined, if plaintiff prevails on the merits, according to settled

rinciples controlling the district court’s discretion to grant or with-

hold injunctive relief. See J. Moore, 7 Moore’s Federal Practice

Para. 65.18[3] (2d ed. 1969).

EE St es

Decision (4/16/74) A97

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 (1923), indicated that an injury to many

might confer standing to none, Flast intimates that

Frothingham stated policy, not constitutional dogma, F last

v. Cohen, supra at 93-94, and SCRAP declared that

standing is not lost because the harm asserted is uni-

versally 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 deter-

mine 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, Nos. 73-1249

& 73-1420, 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 (1972),

and Association of Data Processing Service Organizations

v. Camp, 397 U. 8. 150, 153-54 (1970). Alleging personal

injury from defendants’ violation of a federal statute,

plaintiff may invoke our jurisdiction under 28 U. 8. 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 en-

titled 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. 8. 0. § 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 ex-

penditure in connection with any [federal] election . . inn

A98 Decision (4/16/74)

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 de-

signed 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. Sia Unknown Named

Agents, 403 U. S. 388, 395-97 (1971); Wyandotte Co. v.

United States, 389 U: S. 191, 200-02 (1967); J. I. Case Co.

v. Borak, 397-U.S, 426, 431-35 (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, 42 U. 8. 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 par-

ticular remedy. Bivens v. Sia Unknown Named Agents,

supra at 395-97 (opinion of the Court), and 402-03, n. 4

(Harlan, J., concurring); Holloway v. Bristol-Meyers

Corp., 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 Asso-

ciation of Railroad Passengers, supra (hereinafter ‘‘Am-

Decision (4/16/74) A99

trak’’), 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 con-

struction does not alter the process used to determine if a

cause should be inferred in the absence of statutory lan-

guage indicating legislative intent; rather, it aids the court

merely in determining when legislative intent to preclude a

remedy can be fairly implied.*

For the Amtrak rule to apply, the statute must ex-

pressly provide the plaintiff a remedy that may logically be

said to be exclusive. In Amtrak, the remedy expressly pro-

vided to correct the harm of which plaintiffs complained

vas 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.** Only a criminal sanction is expressly pro-

statutory construction in Amtrak is unclear. After announcing the

rule, the Court went on to find evidence of a clear législative intent

to withhold the remedy sought, National R. R. Pass. Corp. y. Na-

tional Ass’n of R. R. Pass., 42 U. S. L. W. 4132, 4134.35 (i. &.

Jan, 9, 1974) ; the Court also examined the = as it conceived

of 1970, 45 U. S. C. §§ 501, et seq. (1970), and found that implica-

tion of a private remedy there would be inconsistent with those poli-

cies, id. at 4135-36,

3a, Judge Aldisert notes that, in contrast to title II of the

lection Campaign Act of 1971, amending inter alia § 610,

title III expressly provides a civil cause of action to the Attorney

General. is provision referred to by Judge Aldisert allows the

Attorney General to institute a civil action for violation of certain

reporting and disclosure requirements imposed on candidates and

Fo a vn committees. These requirements were first imposed by the

1971 Act and criminal penalties for their violation were first pro-

vided in the 1971 Act.

Provision of this civil remedy may well bar inference of a private

remedy for violation of these reporting and disclosure requirements.

A100 Decision (4/16/74)

vided for violation of §610. Courts have consistently held

that statutes providing for criminal liability do not pre-

clude assertion of private causes of action. E.g., Wyan-

dotte Co. v. United States, supra at 200-02; Texas & Pacific

Railway Co. v. Rigsby, 241 U. S. 33, 39-41 (1916). In

Rigsby the Supreme Court, inferring a private cause of

action for violation of a criminal provision, distinguished

‘*remedial’’ from ‘‘penal’’ application of a statute. Id. at

41. Thus, since § 610 cannot be said to provide any remedy

for the alleged harm to plaintiff here, Amtrak would not

preclude fihding an implied cause.

Statutory Design

Our inquiry, then, must be, first, whether (610 was

designed to protect plaintiff from the harm he alleges.

Section 610 is the end-product of a series of enactments

limiting campaign giving and spending. See United States

v. UAW, 352 U. S. 567, 570-84 (1957). In discussing the

seminal federal limitation on corporate campaign contri-

butions, carried forward into the present 4610, the Supreme

Court stated that it was ‘‘motivated by two considerations.

First, the necessity for destroying the influence over elec-

tions which corporations exercised through financial con-

tribution. Second, the feeling that corporate officials have

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, 113 (1948) [footnotes

omitted].

3a. (Cont’d.)

We do not, however, believe that any intent to ‘bar the remedies

sought here can be inferred from the 1971 Act’s grant of a civil, as

well as a criminal, action for violation of conduct first proscribed in

1971 and its failure to grant any civil remedies for conduct prohibited

since 1907. Amtrak certainly does not require that such an inference

be drawn from the 1971 Act’s amendment of longstanding criminal

provisions coincidentally joined, albeit in separate titles, with promul-

gation of new civil and criminal actions.

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Decision (4/16/74) A101

As a voter and citizen, plaintiff is within the class

Congress sought to protect by prohibiting corporate ex-

penditures in campaigns for federal office ; Congress, in the

various enactments embodied in §610, declared its view

that such expenditures reduced the ability of voters to

secure a government responsive to their wishes and in-

creased the likelihood of governmental actions favorable to

particular economic blocs but inimical to the general wel-

fare. Id.; 117 Cong. Rec. 43379-81 (1971) (remarks of

Congressman Hansen).

As a stockholder, plaintiff is within ‘the class sec-

ondarily protected by §610, which keeps control over

political contributions in his hands -and not in those of

corporate managers or directors. IJd.; 117 Cong. Ree.

43384-85 (remarks of Congressman Thompson). The harm

to plaintiff as a voter and citizen, while not set forth ex-

plicitly in his complaint, is presumably the intangible harm

foreseen by Congress. The alleged harm to plaintiff and

other Bethlehem stockholders is the loss of over one-half —

million dollars from the corporation’s treasury for the

challenged expenditures. Clearly plaintiff satisfies the

first requirement for determining a cause of action to be

implied in § 610.

Defendants contend, however, that Congressional in-

tent to protect voters, citizens and stockholders does not

satisfy the implied cause test. First, defendants argue that

§ 610 primarily protects not voters and citizens but the

public in general and that a cause of action will only be

implied to protect members of a specific, limited class. We

4. In focusing on the harm to plaintiff and the propriety of ac-

cording him a remedy, we are aware that damages are sought not

for plaintiff as an individual stockholder but, in the form of a deriva-

tive action, for all injured stockholders. Where stockholders suffer

injury jointly from violation of federal rights, a derivative action

may be an implied remedy. See Drachman v. Harvey, 453 F. 2d

722, 736-38 (2d Cir. 1972) (in banc).

istic eee | ta

SS ni alla ei la eS Tal

A102 Decision (4/16/74)

reject defendants’ argument that provisions designed for

the protection of the entire American public cannot give

rise to implied causes. See Bivens v. Six Unknown Named

Agents, supra (finding a private cause of action implied in

the Fourth Amendment’s protection of ‘‘[t]he right of the

people to be secure . . . against unreasonable searches and

seizures... .’’). The breadth of the protected class is,

however, relevant to the propriety of allowing criminal

sanctions, rather than private actions, to enforce a stat-

utory prohibition and will be considered below.

Second, defendants argue that no cause of action may

be implied to protect plaintiff qua stockholder because such

protection was only a secondary purpose of § 610. Although

it may be improper to infer a cause of action from a statute

only incidentally protecting plaintiff, the Supreme Court

has indicated that protection of stockholders was not merely

an incidental purpose of § 610, United States v. CIO, supra

at 113, and protection of plaintiff need not be the act’s

primary purpose. See J. I. Case Co. v. Borak, supra at

431-32; ef. Wyandotte Co. v. United States, supra.

Propriety of Private Action.

In determining the propriety of affording plaintiff a

cause of action for violation of § 610, we must ascertain

whether such a remedy will effectuate the act and whether

any ‘‘collateral’’ considerations counsel withholding this

remedy. Since the purpose of the section is to prevent cer-

tain expenditures, allowing suit to enjoin or recover such

expenditures would seem to be consistent with accomplish-

ment of §610’s goal. Although the breadth of §610’s

coverage favors enforcement solely by criminal sanction

to avoid a multiplicity of possible suits challenging in-

tangible public harm,> the intent to protect many people

5. This objection pertains to suits by non-stockholder citizens.

Here, of course, plaintiff sues not only as a citizen and voter but also

as a stockholder of the allegedly offending corporation, a narrower

- ” ee

Decision (4/16/74) 103

from many possible violations also favors individual suits

to enforce the act as the number of putative defendants,

committing acts more likely to be covert than notorious, is

so great that government enforcement alone might prove

insufficient, ef. Byram Concretanks, Inc. v. Warren Concrete

Products Co., 374 F. 2d 649, 651 (3d Cir. 1967). We note

that steckholders, able to protect their investments by re-

covering damages on behalf of the corporation, may be

expected to be particularly vigilant in detecting violation

of § 610.

The nature of the prohibited conduct further supports

provision of private remedies. Contributions or expendi-

tures to influence federal elections are prohibited; yet the

politician whose election is facilitated by violation of § 610

may be in charge of the statute’s enforcement. This

possible conflict of interest is not simply hypothetical;

plaintiff alleges that in the instant case non-enforcement of

§610 by the Justice Department was due to the Depart-

ment’s control by the candidate defendants supported.*

The relative expeditiousness possible in civil, con-

trasted with criminal, proceedings, also supports implica-

tion of a cavse here. The section’s primary focus is on

preventing the corruption of elections by corporate con-

tributions. Violations of § 610 are, we presume, most likely

5. (Cont’d.)

class suffering tangible harm. We recognize also that the number

of putative § 610 plaintiffs would be much smaller where, for in-

stance, a Congressional rather than Presidential election is involved.

6. Among reasons cited by the district judge for concluding that

plaintiff lacked a cause of action was his unwillingness to “assume

the partisan enforcement of the Act as plaintiff suggests.” 350 F.

Supp. at 231. We make no such assumption here. While plaintiff

has alleged, and presumably stands ready to prove, partisan enforce-

ment of — our finding of a cause of action is supported simply by

the possibility of such enforcement, or non-enforcement—presence or

absence of actual partisan enforcement in this case is irrelevant to

our determination.

A104 Decision (4/16/74)

to occur in the period immediately preceding an election,

and, given the delays incident to criminal investigation and

grand jury indictment as well as trial, the election may well

be over before the section’s violation is determined. Pri-

vate enforcement, particularly by injunction, can be rela-

tively swift.

We note no countervailing reason for denying private

remedies here. The matter before us involves none of the

“special circumstances’’ discussed in Borak as counseling

denial of a private cause of . tion. See J. J. Case Co. v.

Borak, supra at 396-97. Nor does § 610 involve the opera-

tion of a regulatory agency whose policy determinations

on this or other matters might be threatened by allowing

private enforcement. See Holloway v. Bristol-Meyers

Corp., supra at 990-92, 997-1002. Thus, we find allowance

of 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, proper to remedy

violation of § 610.’

ITI.

The district court concluded, defendants contend

rightly, that even if plaintiff were found to have a cause

of action under § 610, defendants would be entitled to judg-

ment as a matter of law. 350 F. Supp. at 231-32. The court

decided that the meaning of ‘‘contribution or expenditure’’

in § 610 was governed by the definition of those terms in 18

U. S. C. §591 (1970), as amended (Supp. iI 1972); that

§ 591 requires a purpose to influence the nomination or

election of a particular person; and that defendants’ ad-

7. The propriety of awarding such relief must depend on the

circumstances of each case. We note also that where a non-stock-

holder plaintiff sues, presumably only for injunctive relief, there

may be a question as to the plaintiff’s ability to satisfy the $10,000

jurisdictional amount for 28 U. S. C. § 1331 (1970).

Decision (4/16/74) A105

vertisements and pamphlets were designed not to influence

election of any person but to advocate an honest campaign

and ‘‘respond to an accusation leveled against the business

community.’’ Jd. Plaintiff contests and defendants sup-

port each of these conclusions.

Scope of § 610.

Plaintiff disagrees with judging Bethlehem’s expendi-

tures by the §591 definition of that term, claiming that —

§ 610 contains a more specific definition of the term, which

should control here. Section 591, in relevant part, reads:

When used in sections 597, 599, 600, 602, 608, 610 and

611 of this title—

* * *

(f) ‘‘expenditure’’ means—

(1) a purchase, payment, distribution, loan,

advance, deposit, or gift of money or anything

of value . . ., made for the purpose of in-

fluencing the nomination for election, or elec-

tion, of any person to Federal office... .

Section 610, as pertinent, states that ‘‘[a]s used in this

section, the phrase ‘contribution or expenditure’ shall

include any direct or indirect payment .. . to any candi-

date, campaign committee, or political party or organiza-

tion....’’ Corporate communication to stockholders and

non-partisan ‘‘get-out-the-vote’’ drives aimed at stock-

holders and their families are explicitly excluded.

The definition given ‘‘expenditure’’ in both sections

traces back to the Federal Election Campaign Act of 1971,

P. LL. 92-225, Title II, §§ 201, 205, 86 Stat. 3. The drafters

clearly intended §591’s definition to affect ‘interpretation

of $610, for they expressly provided that the definitions

in §591 applied to use of those terms in ¢610. We note

A106 Decision (4/16/74)

also that § 591 indicates the ‘‘meaning’’ of expenditure

while §610 only indicates certain matters ‘‘included’’ in

that term. We therefore read §610 as supplementing

rather than replacing §591’s definition. Nothing spe-

cifically included as an expenditure for § 610, however,

covers Bethlehem’s challenged actions. Thus, it appears

that the district court was correct in concluding that

Bethlehem’s challenged expenditures are not proscribed

unless they fall within ¢ 591’s definition of ‘‘expenditure.”’

An integral part of §591’s definition of prohibited

expenditures is the requirement that they be for the pur-

pose of influencing someone’s election to federal office—

in other words, § 591 requires a partisan purpose. Plain-

tiff argues, however, that § 610, by negativeimplication in

its exclusion of only some non-partisan get-out-the-vote

drives, makes unlawful other get-out-the-vote drives, even

though non-partisan. Plaintiff supports his contention by

reference to legislative history.

Several comments by key Congressmen in debate over

the most recent amendment to {610 indicate.that the

section now would prohibit a non-partisan get-oul-the-vote

drive if financed from a corporation’s general_treasury

and aimed at the general public. See, e.g., 117’Cong. Rec.

43380-81 (remarks of Congressman Hamsen), 43381 (re-

marks of Congressmen Hansen and Hays), 43387-88 (re-

marks of Congressmen Ashbrook, Hansen and Hays). The

debates also indicate that members of Congress had a

fairly specific and limited type of activity in mind when

speaking of ‘‘get-out-the-vote’’ drives, primarily door-to-

door canvassing and escorting people to the polls, see id.

at 43386 (remarks of Congressman Crane), 43387 (remarks

of Congressman Ashbrook), 43388 (remarks of Congress-

man Hays), and that the primary concerns with such

drives were, first, that they were generally non-partisan

Decision (4/16/74) A107

in name only, and, second, that their partisanship was not

often apparent to observers, see id. at 43388 (remarks of

Congressman Ashbrook), 43390 (remarks of Congressman

Steiger).

Application of § 610.

The expenditures challenged here were for activities

that would not seem to have the hallmarks of a ‘‘get-out-

the-vote’’ drive—Bethlehem’s communications were in

writing and aimed at the entire public, rather than selected

portions, so their partisanship, if any, could be readily

determined. We would not, on the present record, find

Bethlehem’s expenditures for these communications, if

non-partisan, to be proscribed by any prohibition on non-

partisan get-out-the-vote drives that may be implicit in

§610. We turn to the inclusion or exclusion of these

expenditures from the definition of that term in § 591.

The district court found that Bethlehem ’s expenditures

were non-partisan and thus outside the sweep of § 591 and,

hence, of §610. This finding rests on the fact that no

candidate or party was named in the corporation’s ad and

pamphlet. Unless § 591 requires that a candidate or party

be named, the district court’s grant of summary judgment

cannot be upheld; the partisanship of Bethlehem’s state-

ments is a factual question as to which the parties are in

dispute,® and on summary judgment we must accept as

true plaintiff’s allegation of partisanship. See Johnson v.

Alldredge, 488 F, 2d 820, 823 (8d Cir. 1973).

Nothing in the language or legislative history sup-

ports an interpretation of sections 591 and 610 that would

make lawful an expenditure simply because in the com-

8. The definition of expenditure in § 591 requires a partisan

Purpose ; we assume here that where a communication is the expendi-

ture’s direct product, the partisan purpose must appear from the

communications content, viewed in light of surrounding circumstances.

A108 Decision (4/16/74)

munication it paid for no candidate was named. There

is no evidence Congress thought the American public so

unperceptive that it would recognize a statement as sup-

porting or attacking a particular candidate only by use

of his name; such a requirement would eviscerate §¢ 610.

Since dispute exists as to a material factuzl issue, the

district court erred in granting summary judgment and

denying plaintiff’s motion for an evidentiary hearing.

IV.

Defendants contend that 4610 is unconstitutional,

urging a variety of grounds. Although defendants do not

treat their various constitutional contentions separately,

their underlying argument appears to be that, if applied

to prohibit non-partisan political speech, § 610 would vio-

late the First Amendment. Because we have decided that

§610 would proscribe Bethlehem’s expenditures only if

they financed partisan communications, we do not reach

defendants’ constitutional contentions. See United States

v. UAW, supra at 591-92. We note that the district court

has never passed on these contentions and that they may

be reasserted on remand.

The judgment of the district court is reversed and the

matter is remanded for further proceedings consistent with

this opinion.

ALDISERT, Circuit Judge, dissenting.

Standing in this case does not trouble me. This is not

a taxpayer’s suit, Flast v. Cohen, 392 U. S. 83 (1968),

Frothingham v. Mellon, 262 U. S. 447 (1923); nor a suit to

obtain judicial review of agency action, United States v.

Students Challenging Regulatory Agency Procedures, 412

U. 8. 669 (1973), Sterra Club v. Morton, 405 U. S. 727

(1972), Association of Data Processing Service Organiza-

tions, Inc. v. Camp, 397 U. S. 150 (1970); nor a voter’s

Decision (4/16/74) A109

complaint alleging impairment of his right to vote, Baker

v. Carr, 369 U. S. 186 (1962). Only the damages aspect of

the complaint has survived the mootness of the injunctive

request. Thus, the claim is reduced to a garden variety

case or controversy in which a plaintiff stockholder asserts

economic harm to the corporation for which he has stand-

ing derivatively on behalf of the corporation. Kauffman

v. Dreyfus Fund, Inc., 434 F. 2d 727 (3d Cir. 1970), cert.

denied, 401 U. S. 974 (1971).

I have heretofore expressed discomfort with certain

decisions of this court regarding standing. See, United

States v. Richardson, 465 F. 2d 844 (3d Cir. 1972), (Adams,

J., dissenting, joined by Aldisert and Hunter, JJ.), and

Schiaffo v. Helstoski, — F. 24 — (3d Cir., Nos. 72-2167/68,

January 4, 1974) (Aldisert, J., dissenting.) And I would

hope that the district courts and courts of appeals will soon

receive definitive guidance in this “complicated specialty

of federal jurisdiction, the solution of whose problems is in

any event more or less determined by the specific circum-

stances of individual situations. . . .’’! The Supreme

Court has heard argument in two important standing cases,

United States v. Richardson, supra, (No. 72-885, argued

October 10, 1973), 42 U. S. L. W. 3216, and Richardson v.

Reservists Committee to Stop the War, (No. 72-1188,

argued January 14, 1974), 42 U. S. L. W. 3418.

The standing issue aside, I would affirm the district

court because I find that Congress has not provided a civil

remedy for the plaintiff expressly or by implication. While

an implied right of action may be rationalized with con-

siderable persuasion, this can be done only by defying the

Supreme Court’s recent pronouncement in National Rail-

road Passenger Corp. v. National Association of Railroad

1. United States ex rel. Chapman v. Federal Power Commis-

sion, 345 U. S. 153, 156 (1953).

A110 Decision (4/16/74)

Passengers, — U. S. —, (42 U. S. L. W. 4132, January 9,

1974) (Amtrak). I see Amtrak to be a definite signal to

the courts of appeal and district courts to decelerate use of

excerpts from Justice Clark’s opinion in J. I. Case Co. v.

Borak, 377 U. S. 426, 431-432 (1964), to find implied civil

remedies not expressly authorized by Congress. Three

bright warning lights were flashed in Amtrak:

.1, ‘‘[T]he inference of . . . a private cause of

action not otherwise authorized by the statute must be

consistent with the evident legislative intent and, of

course, with the effectuation of the purposes intended

to be served by the Act.’’

2. ‘‘A frequently stated principle of statutory con-

struction is that when legislation expressly provides a

particular remedy or remedies, courts should not ex-

pand the coverage of the statute to subsume other

remedies. ‘When a statute limits a thing to be done in

a particular mode, it includes the negative of any other

mode.’ Botany Mills v. United States, 278 U. S. 282,

289 (1929). This principle of statutory construction

reflects an ancient maxim—expressio unius est exclusio

alterius.”’

3. ‘‘[T]he most basic general principles of statu-

tory construction must yield to clear contrary evidence

of legislative intent. Neuberger v. Comm’r, 311 U. 8.

83, 88 (1940).’’

42 U.S. L. W. at 4134.

Amtrak’s first principle, the imperative to ascertain

legislative intention, requires that we examine the entire

legislative package known as the Federal Election Cam-

paign Act of 1971. This case is brought under Title II of

Decision (4/16/74) All1

‘the Act, containing amendments to Title 18 of the United

States Code, including 18 U. S. C. §610. There is no ex-

press provision for a civil remedy, public or private, in

Title II. By contrast, Title II of the Act authorizes the

Attorney General on behalf of the United States to com-

mence a civil action for violation of its subchapter. See, 2

U. S. C. § 488(d)(1)-(5). This public cause of action in

Title III supplements the penal provision of that Title, 2

U.S.C. $441. See also, 11 C. F. R. §§ 20.10 and 20.11. In

T.1. M. E., Inc. v. United States, 359-U. 8. 464 (1959), the

Court refused to imply a private right of action in favor

of shippers under the Motor Carrier -sct of 1935, 49 U.S. C.

§ 316(b) and (d) (Interstate Commerce Act, Part II), for

overcharges by certified carriers. The government, as a

shipper, brought suit against the carrier contending that

this language imposed a statutory duty on motor carriers

not to charge or collect other than ‘‘reasonable’’ rates and

urged that a cause of action be implied. The Supreme

Court refused to imply a caus

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