## Facts

- Directors of Bethlehem Steel authorized the use of corporate funds to purchase political advertisements during the 1972 presidential campaign.
- A shareholder brought a derivative action seeking injunctive relief and damages, alleging the expenditures violated 18 U.S.C. § 610, a federal criminal ban on certain corporate election contributions or expenditures.
- The shareholder initially also asserted a Delaware-law ultra vires theory but later dropped that claim after being required to post security for expenses under state law.
- The district court granted summary judgment for defendants, concluding § 610 provided criminal penalties only and did not authorize a private civil action.
- The Third Circuit reversed, holding the case was not moot and that a private action could be implied to remedy § 610 violations.
- While review was pending, Congress enacted the Federal Election Campaign Act Amendments of 1974, creating an enforcement structure centered on the Federal Election Commission (FEC), including a citizen-complaint process and potential injunctive action through the Attorney General.

## Issues

1. Whether, after the 1974 FECA amendments, a private plaintiff may obtain injunctive relief for alleged future violations of 18 U.S.C. § 610, or whether such enforcement is assigned to the FEC framework.
2. Whether a private derivative damages action may be implied from 18 U.S.C. § 610 for an alleged past violation.

## Decision

- The Supreme Court unanimously reversed the Third Circuit in an opinion by Justice Brennan.
- The Court applied the law in effect at the time of decision and held that requests for prospective injunctive relief regarding future § 610 violations fall within the enforcement process established by the 1974 FECA amendments and the FEC’s role.
- The Court held that § 610 does not imply a private right of action for damages for a past violation; any shareholder remedy, if available, lies under state corporate law.

## Legal Principles

- Courts determine whether to infer a private right of action from a statute that lacks an express civil remedy by considering:
  - whether the plaintiff is within the class for whose especial benefit the statute was enacted (whether the statute creates a federal right in the plaintiff);
  - whether Congress intended, explicitly or implicitly, to create or deny a private remedy;
  - whether a private remedy would be consistent with the statute’s overall purposes and enforcement structure; and
  - whether the subject matter is traditionally left to state law, making a federal implied remedy inappropriate.
- A “bare” criminal statute, without textual or historical indicators of civil enforcement, generally does not support an implied private damages remedy.
- When Congress establishes a specific administrative and governmental enforcement mechanism for election-law compliance, private suits seeking to enforce future compliance are generally displaced in favor of that mechanism.
- Corporate internal governance and shareholder recourse for allegedly improper corporate expenditures are ordinarily matters of state law absent clear congressional direction to federalize the remedy.

## Conclusion

The Court held that 18 U.S.C. § 610 did not authorize an implied private damages action and that, after FECA’s 1974 amendments, prospective injunctive enforcement regarding future violations is channeled through the FEC-centered enforcement scheme rather than private litigation.


Cort v. Ash, 422 U.S. 66 (1975)