Cort v. Ash
Citation and Court
422 U.S. 66 (1975) — Supreme Court of the United States
Facts
Shareholders of Bethlehem Steel brought a private action against corporate directors, alleging that the corporation had made illegal campaign contributions in violation of a federal criminal statute (18 U.S.C. § 610). No express private right of action existed in the statute. Plaintiffs argued the court should imply one.
Issue
Whether a private right of action should be implied from a federal criminal statute prohibiting corporate campaign contributions.
Holding
No. Applying a four-factor test, the Court found no implied private right of action because the statute was primarily intended to protect the public generally and to preserve democratic processes, not to benefit a particular class of individuals who could enforce it privately.
Rule / Doctrine
Four-factor test for implying a private right of action: (1) Is the plaintiff a member of the class for whose especial benefit the statute was enacted? (2) Is there any indication of legislative intent, explicit or implicit, to create or deny such a remedy? (3) Is a private remedy consistent with the underlying purpose of the legislative scheme? (4) Is the cause of action one traditionally relegated to state law, such that implying a federal cause of action would disturb the federal-state balance?
Significance
Cort v. Ash established the dominant framework for analyzing implied private rights of action and was applied expansively in Cannon v. University of Chicago (1979). The Court has since moved toward requiring explicit congressional intent, effectively collapsing the test into a single question of congressional intent under Alexander v. Sandoval (2001).