Securities and Exchange Commission v. Medical Committee for Human Rights/Dissent Douglas

Mr. Justice DOUGLAS, dissenting.

With all respect, I must dissent from the judgment of the Court that this case has become moot because the Dow Chemical Co. acquiesced in the decision of the Court of Appeals below. The underlying dispute in this case is essentially a private one, between Dow and the Medical Committee for Human Rights, though it has large public overtones. In 1969, Dow refused to submit to its shareholders the Medical Committee's proposal that Dow amend its corporate charter to forbid the manufacture of napalm. Dow refused again in 1970. Only in 1971, after the decision of the Court of Appeals now under review, did Dow permit such a proposal to be submitted for a vote. In doing so, however, Dow resolutely affirmed its right to reject the proposal at any future time.

This gratuitous conduct did not, in my view, moot the controversy. 'Mere voluntary cessation of allegedly illegal conduct does not moot a case.' United States v. Concentrated Phosphate Export Assn., 393 U.S. 199, 203, 89 S.Ct. 361, 364, 21 L.Ed.2d 344. If it could, then a defendant would always be 'free to return to his old ways.' United States v. W. T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303.

But it is said that because of the poor showing made by the proposal when finally submitted, Dow could refuse to resubmit it for three years under SEC proxy rules not at issue in this case. Ante, at 406. The Court suggests that it is 'purely a matter of conjecture' that the proposal will again be submitted at the expiration of this period, and that Dow will attempt again to reject it. The Court seems to think that Dow's best strategy, given the proposal's poor showing, is to let it go to a vote, rather than undertake protracted litigation. Ibid.

This assumption, however, is not only baseless, it is irrelevant. In Grant, supra, an antitrust violation was charged because of an interlocking directorate. In response to the suits, the interlocking directors resigned, and defendant companies represented to the court their intention not to revive the interlock. We disposed of this argument in summary fashion. 'Such a profession does not suffice to make a case moot.' Id., at 633, 73 S.Ct., at 897. Here, Dow has not even made the minimal representation we rejected in Grant, nor is it likely to do so.

This is not a controversy that could not arise again for decades, Golden v. Zwickler, 394 U.S. 103, 89 S.Ct. 956, 22 L.Ed.2d 113, or a controversy whose decision could have no possible future effect on the parties, Atherton Mills v. Johnston, 259 U.S. 13, 42 S.Ct. 422, 66 L.Ed. 814. Dow has for the past four years fought tooth and nail its obligation to include this shareholder proposal. While '(a) case might become moot if subsequent events made it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur,' Concentrated Phosphate Export Assn., supra, 393 U.S., at 203, 89 S.Ct., at 364, that is hardly the situation here.

While this litigation is not formally between Dow and the Medical Committee, but between the SEC and the Medical Committee, it does involve a whole panoply of substantive and procedural rights in connection with a corporation's obligation to include shareholder proposals in proxy materials. The modern super-corporations, of which Dow is one, wield immense, virtually unchecked, power. Some say that they are 'private governments,' whose decisions affect the lives of us all. The philosophy of our times, I think, requires that such enterprises be held to a higher standard than that of the 'morals of the market-place' which exalts a single-minded, myopic determination to maximize profits as the traditional be-all and end-all of corporate concern. The 'public interest in having the legality of the practices settled, militates against a mootness conclusion.' Grant, supra, 345 U.S., at 632, 73 S.Ct., at 897.

There is no reason to assume Dow's antipathy to the inclusion of this shareholder proposal will be any less in 1974 than it is today. Perhaps Dow will adopt the advice given to it by the Court. But it is just as likely to decide its superior financial position makes continued litigation the preferable alternative, which may now be conducted under proxy rules more favorable to corporate management than are the present rules.

This case now joins a growing list of monuments to the present Court's abdication of its constitutional responsibility to decide cases properly within its jurisdiction. See, e.g., Picard v. Connor, 404 U.S. 270, at 278, 92 S.Ct. 509, at 513, 30 L.Ed.2d 438 (Douglas, J., dissenting); North Carolina v. Rice, 404 U.S. 244, at 248, 92 S.Ct. 402, at 405, 30 L.Ed.2d 413 (Douglas, J., dissenting statement); McClanahan v. Morauer & Hartzell, Inc., 404 U.S. 16, at 17, 92 S.Ct. 170, at 171, 30 L.Ed.2d 136 (Douglas, J., dissenting). Once again, I dissent.