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Cort v. Ash

United States Supreme Court
422 U.S. 66 (1975)

Facts

Ash (plaintiff) owned 50 shares of stock in Bethlehem Steel, of which Stewart Cort (defendant) was the chairman of the board of directors. In 1972, Cort used corporate funds to pay for advertisements in multiple national news magazines and local newspapers that included his name, picture, and direct quotes urging votes against U.S. presidential candidates who campaigned for higher taxes against businesses. The advertisements were also included in quarterly dividend checks mailed to Bethlehem shareholders and were available at the corporate office. Ash sued Cort in the United States District Court for the Eastern District of Pennsylvania, bringing a private claim for relief under a federal criminal statute that prohibited corporations from making contributions related to any U.S. presidential or vice-presidential election. 18 U.S.C. § 610. The complaint sought injunctive relief to stop future donations, as well as derivative monetary damages for the corporation. The district court granted summary judgment for Cort, and the court of appeals reversed, holding that a private action by a stockholder for derivative damages was proper under 18 U.S.C. § 610. The United States Supreme Court granted certiorari to Cort.

Rule of Law

Issue

Holding and Reasoning (Brennan, J.)

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