# Appendix — Cort v. Ash > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0434%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1975 - **Citation:** 422 U.S. 66 ## Text Pe) x \ x » : ‘ . . ° rs - 7 . , ~s S L * ‘ , ° ; ’ ~ rs : ‘ N ‘ > a Saeetemeienes ee oo a 2 . 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 w/ 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) 13 14 15 16 17 18 19 Oct. Oct. Oct. Cet. Oct. Oct. Oct. Oct. 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. . 21 22 27 Nov. Jan. Jan. Jan. Feb. Feb. Feb. Feb. Feb. Feb. Feb. 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 & = = RE ' 41 42 45 47 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: 55 56 57 58 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, v. 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 4 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. (C) Judgment against defendants jointly and severally 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 v. 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; e 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. ae 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 v. 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 v. 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 v. 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 by STEWART S. CORT Chairman Bethlehem Steel Corporation Rotary Club Jacksonville, Florida June 12, 1972 ee 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- ] As + 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 2 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 2 Pa J 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 4 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 ss ‘ ’ ‘ 3 - i ‘ ' ‘ / ; i . ; . i . ‘ . ‘ i i ‘ f ‘ ‘ i ‘ t j t : i + [ , s ; / i asics 3 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 MO Neae ee a 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- 6 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 7 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 v. 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 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. es 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 v. 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. an 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. ‘ * * * s ‘*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: x 3 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. (C) Judgment against defendants jointly and severally 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 ay Peete Tee Wilkes RETT Exhibit ate A77 the Campaign honest Mobilize truth squads. Stewart S. Cort, Chairman Bethlehem Steel Corporation Fe “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, v. 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, v. 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, v. 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 v. 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. w 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, v. STEWART S. CORT, LEWIS W. FOY, EDWARD D. BICKFORD, BERNARD D. BROEKER, ALBERT M. REED, C. THOMPSON STOTT, IVOR D. SIMS, CROWDUS BAKER, JESS H. DAVIS, THOMAS S. GATES, ROBERT B. HOBBS and GEORGE P. JENKINS, All Being Directors of BETHLEHEM STEEL CORPORATION, Appellees, and BETHLEHEM STEEL CORPORATION, Nominal Defendant Richard A. Ash, Appellant (D. C. Civil Action No. 72-1925) 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 on corporate campaign spending, 18 U. S, ©. § 610, ( 1970) 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. i. Before addressing the points urged by defendants to justify and plaintiff to attack summary judgment, We must consider two matters of justiciability. Mootness. In affirming the district court’s earlier denial of a preliminary injunction, we limited our decision narrowly, holding only that the court’s finding of no irreparable harm to plaintiff from denying the injunction was not clearly erroneous. 471 F. 2d 811 (3d Cir. 1973). At that time, however, we noted that the question of mootness would have to be examined at a later point. in these 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 ; 4 a E , E 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 Se 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- a 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 At [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0434%3A01. Public record. Not legal advice.