1

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 93-8451

KARL ROVE & COMPANY

 Plaintiff-Appellee/

 Cross-Appellant,

v.

RICHARD THORNBURGH, ET. AL.,

Defendants,

RICHARD THORNBURGH,

Defendant-Appellant/

Cross-Appellee, 

RAYMOND P. DIMUZIO, Defendant/CrossAppellee. 

Appeals from the United States District Court for the

Western District of Texas

(November 30, 1994)

Before SMITH, WIENER, and BENAVIDES, Circuit Judges.

WIENER, Circuit Judge:
2

This appeal arises from a diversity jurisdiction suit on a

contractual debt. Defendant-Appellant/Cross-Appellee Richard

Thornburgh ("Thornburgh") asks us to reverse the district court's

judgment holding him personally liable for a contractual obligation

incurred during his campaign for the U.S. Senate by the "Thornburgh

for Senate Committee" (the "Committee"), Thornburgh's

unincorporated principal campaign committee. He argues that the

district court erred by finding that))personally and through his

general agent, Murray Dickman ("Dickman")))Thornburgh authorized,

assented to, or ratified the Committee's contract on which the

court held him personally liable. The Republican National

Committee ("RNC"), appearing as amicus curiae, argues that the

district court ignored notions of federalism, and thus applied an

incorrect legal standard, in determining Thornburgh's liability for

the Committee's debt. 

In response, Plaintiff-Appellee/ Cross-Appellant, Karl Rove &

Company ("Rove & Company") cross appeals the district court's

dismissal of Rove & Company's claim against Defendant/CrossAppellee, Ray Dimuzio ("Dimuzio") for lack of personal

jurisdiction. Rove & Company argues in the alternative that if

Thornburgh is not liable for the Committee's contract, then Dimuzio

is, thus vesting the court with personal jurisdiction. As we

conclude that the district court properly interpreted and applied

the correct legal standard, we affirm the district court's judgment

holding Thornburgh liable and dismissing Rove & Company's claim

against Dimuzio for lack of personal jurisdiction.
 

1See Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662 (W.D.

Tex. 1993).

3

I 

FACTS AND PROCEEDINGS

A. BACKGROUND

The facts material to the outcome of this appeal are

relatively straightforward and, for the most part, undisputed. As

the district court in its opinion has already provided an accurate

and detailed chronology of the events leading up to this

litigation,1 we limit our reiteration to those facts directly

relevant to the issues raised on appeal.

In 1991, Thornburgh ran in a special election to fill the U.S.

Senate seat that had become vacant when Pennsylvania Senator John

Heinz was killed in an aircraft accident. Dickman, a longtime

Thornburgh aide, agreed to the offer of Rove & Company to provide

direct mail fundraising services for the campaign, upon

Thornburgh's entering into the U.S. Senate race and establishment

of a principal campaign committee. The instant dispute arose when,

after Thornburgh lost the election, the then-insolvent Committee

failed to pay Rove & Company for services that it had provided

pursuant to a contract with the Committee, dated September 18, 1991

(the "September Contract"). 

There is no longer any dispute regarding the existence or

quantum of the Committee's liability to Rove & Company on the

September Contract. On appeal, therefore, the only issue is

whether Thornburgh personally has joint and several liability with
 

2The September Contract also contained the following

provision, which required that the Committee designate a

representative for the purposes of the contract:

4. [THE COMMITTEE'S] REPRESENTATIVE. [The Committee] 

designates ____________________ as their [sic]

representative for the purposes of this Agreement, and

such designation shall constitute [the Committee's]

authorization for them [sic] to deal with [Rove &

Company] and make all decisions on behalf of [the

Committee] pursuant to this Agreement and [Rove &

Company] shall be entitled to rely on the advice,

decision and direction of this person as being the

advice, decision and direction of [the Committee].

In a September 9, 1991 memorandum to Rove & Company, Committee

Financial Director Bob Mason, on behalf of the Committee,

designated himself and Michele Davis, the Committee's Campaign

Manager, as the Committee's representatives.

 

3Karl Rove & Co., 824 F. Supp. at 666, 669-70. 

4

the Committee for the debt to Rove & Company. If not, then we must

consider whether Dimuzio is personally liable for the debt, and

thus subject to the jurisdiction of the court.

The September Contract was between Rove & Company and the

Committee, not Thornburgh. That agreement contained a signature

line for both parties and identified "Murray Dickman" as the

proposed signatory for the Committee.2 Rove signed the contract

and forwarded it to Bob Mason ("Mason"), the Financial Director of

the Committee, who, in turn, delivered it to Dickman. But neither

Dickman nor anyone else ever signed the document for the Committee.

The district court found nonetheless that Rove & Company and the

Committee thereafter conducted business according to the terms of

the September Contract.3 There is no evidence in the record,

however, that Thornburgh ever saw this agreement or knew of its

terms and conditions. 
 

4Id. at 668. 

 

5Later, Mason and Davis had more direct contact with Rove &

Company.

5

Dickman is a longtime Thornburgh aide, who, according to the

district court, was widely known to be Thornburgh's spokesman.4

Karl Rove ("Rove"), the president of Rove & Company, initiated the

contact with Dickman when Rove learned that Thornburgh was

interested in running in the special election to select Heinz'

successor. Rove contacted Dickman because Rove was aware of

Dickman's association with Thornburgh and knew that Dickman was the

person who had been in primary control of Thornburgh's previous

campaigns.

True to form, Dickman also played a prominent role during this

senatorial campaign. He took part in the Committee's decision to

hire Michele Davis ("Davis") as campaign manager, a position

characterized as the chief executive officer of the Committee.

Dickman was the primary point of contact between the Committee and

Thornburgh; Dickman was also one of the persons involved in the

Committee's decisions to hire Rove & Company, then whether to pay

Rove & Company, and, if so, when to pay Rove & Company. 

Dickman conducted the initial negotiations with Rove & Company

on behalf of the Committee and, in the early stages of the

campaign, delivered much of the material that Rove & Company needed

to conduct the direct mail campaign.5 For example, in response to

Rove's request, Dickman obtained and supplied Thornburgh's own list

of political donors, a collection of Thornburgh's speeches,
 

6Karl Rove & Co., 824 F. Supp. at 668 n.8. 

6

personal letters, previous campaign materials, and an exemplar of

Thornburgh's signature. Dickman was also the person who instructed

Rove that Thornburgh wanted the letterhead on all solicitation

letters to read "Dick Thornburgh," not "Richard Thornburgh." In

his discussions with Rove, however, Dickman never expressly

represented himself as an agent for either Thornburgh or the

Committee.

Thornburgh's direct interactions with Rove and with Rove &

Company were more limited than Dickman's. In fact, the district

court found that Rove's only personal contact with Thornburgh

occurred on September 23 or 24, 1991, when Rove accidentally ran

into Thornburgh in an airport.6 Rove stated that he identified

himself to Thornburgh as the person running the direct mail

fundraising campaign, and that Thornburgh responded by telling Rove

that he was doing a good job and to keep up the good work. At no

time, however, was Rove or anyone else told by Thornburgh that he

intended to be personally liable to Rove & Company for the

September Contract or any other debt incurred with regard to the

services provided by Rove & Company.

Thornburgh denied that he knew whom the Committee had retained

to provide direct mail fundraising services. He did acknowledge,

however, that he was aware that the Committee had contracted to

have such services provided and that the Committee was being

charged for these services. Neither did Thornburgh object to the

Committee's decision to purchase direct mail fundraising services;
 

7Id. at 675 n.21.

7

in fact, he testified that: "I assisted the [C]ommittee in

whatever way that I could in helping them to raise money through a

direct mail effort" and "I cooperated with [the Committee] and

facilitated with them and facilitated their efforts to see that the

contract [for direct mail services] went forward."

In support of those fundraising efforts, Thornburgh authorized

the Committee to use his signature on the solicitation letters; he

made available his political donors' list; and, he reviewed and

edited the content and language of several fundraising letters.

Thornburgh testified that he inspected the letters for accuracy to

"protect his reputation." Although Thornburgh did not review each

such letter, the district court found that there was very little

variation in these fundraising letters, and that "once Thornburgh

had approved the content and language of a given story or statement

attributed to him, there would be no need for him to review

subsequent letters reincorporating the same substance."7 Finally,

Thornburgh admitted that he had the authority, if he desired, to

stop completely all direct mail fundraising efforts on his behalf

at any time. 

Thornburgh also testified regarding his knowledge of and

interactions with the Committee. On his statement of candidacy,

Thornburgh designated the Committee as his only "principal campaign

committee." He also approved Dimuzio as treasurer of the

Committee.

Thornburgh testified, however, that he did not know who was on
 

8Id. at 667. 

 

9Id. at 668. 

 

10Id. 

8

the Committee, did not select or approve its members, and did not

know who had authority to act for the Committee. He further

testified that he was not familiar with the inner workings of the

Committee, was not involved in the management of Committee

finances, did not know how the Committee spent its funds, and

played no part in the Committee's selection of vendors in general

or Rove & Company in particular. 

In light of the fact that Thornburgh is a "very experienced

and intelligent politician with intimate knowledge of the inner

workings of political campaigns," the district court found that

Thornburgh's testimony regarding his attenuation from the Committee

lacked credibility.8 The district court commented that "there is

no way a man of his intellect))a man who was entrusted with the

governorship of his home state and who served as Attorney General

for his nation))did not have control of the organization running

his campaign either directly or through persons in his confidence

and of his choosing."9 The district court found more credible the

testimony of Mason, who had stated that Thornburgh was "ultimately

in control" of the campaign.10

In all, Rove & Company completed 28 separate projects, mailed

695,094 letters, and raised over $750,000, netting $425,000 for the

Thornburgh campaign. Among those totals, 11,440 solicitation

letters were mailed to Texas residents, 306 of whom responded and
9

contributed a total of $83,034. All of the money received by the

Committee was used exclusively to fund Thornburgh's campaign for

the Senate. Of Rove's total billings to the Committee, $169,732.48

went unpaid, excluding interest and attorneys' fees.

B. PROCEDURAL HISTORY

Rove & Company filed the instant suit in federal district

court against Thornburgh, Dimuzio, and the Committee, seeking

recovery for breach of contract, quantum meruit, fraud, and theft

of services. A bench trial was held on April 1 and 2, 1993. On

June 17, 1993, the district court dismissed Rove & Company's claim

against Dimuzio for lack of personal jurisdiction, but held

Thornburgh and the Committee jointly and severally liable for

breach of contract. Having found liability under this breach of

contract, the district court did not address Rove & Company's other

theories of liability.

ThornburghSQbut not the CommitteeSQtimely filed a notice of

appeal. Thornburgh complains to us that the district court erred

in holding him liable based on the finding that he, personally and

through his general agent, Dickman, authorized, assented to, or

ratified the September Contract between Rove & Company and the

Committee. In particular, Thornburgh challenges the district

court's conclusions that he assented to the September Contract and

that Dickman was his general agent, vested with authority to enter

into contracts on behalf of Thornburgh personally. 

Not unexpectedly, Rove & Company responds that the district

court got it right. Guarding against the eventuality that we might
 

11Id. at 671.

 

12Id. at 671-672.

10

reverse the district court, however, Rove & Company filed a cross

appeal in the alternative, urging that the district court's

dismissal of the claim against Dimuzio for lack of jurisdiction in

personam was error, and reiterating the claim that Dimuzio, as the

designated treasurer of the Committee, is personally liable on the

September Contract. Dimuzio not only asks us to dismiss Rove &

Company's cross appeal but to impose sanctions as well, arguing

that Rove's cross appeal is frivolous and inadequately briefed.

II

ANALYSIS

This is truly a case in which procedure imitates substance.

Rove & Company is a corporation created under the laws of Texas.

The district court properly found that it had jurisdiction over the

Committee because the Committee purposely availed itself of the

services of this Texas corporation, which would perform a material

part of its contractual obligations from and within Texas.11

Likewise, if either Thornburgh or Dimuzio is held liable for the

September Contract))either as a result of such person's or persons'

conduct or that of an agent))for availing himself of the Texas

Corporation's services, then the court will have personal

jurisdiction over such person or persons too as a result of this

conduct.12 Accordingly, we first consider who, if anyone, might be

personally liable for the September Contract between Rove & Company

and the Committee.
 

132 U.S.C. §§ 431-455 (1988). 

11

A. THE LEGAL FRAMEWORK OF THIS DISPUTE

We have never before been called upon to consider the extent

to whichSQor under what circumstancesSQa candidate for federal

office, or the treasurer of such a candidate's unincorporated

principal campaign committee, may be held personally liable for a

contractual debt incurred by such a committee. Accordingly, we

must determine which jurisdiction's body of substantive law governs

such situations, then apply that law to the facts of this case.

1. Applicable Substantive Law

The district court applied substantive state law in concluding

that Thornburgh was liable for the Committee's debts. Thornburgh

argues that state law is inapposite, as Congress, by enacting the

Federal Election Campaign Act of 1971 ("FECA"),13 preempted the

application of state law by immunizing candidates for federal

office from personal liability. In its amicus role, the RNC argues

that because the resolution of this dispute will have a significant

impact on important federal interests, federal common law, not

state law, should govern. We address each argument in turn.

a. FECA Preemption

For the first time on appeal, Thornburgh contends that by

enacting FECA, Congress has preempted the field, thereby barring

the application of state law to all situations involving the

liability of candidates for federal office for the debts of their

principal campaign committees. "We will ordinarily consider an

argument advanced for the first time on appeal only if the issue is
 

14In re HECI Exploration Co., 862 F.2d 513, 521 (5th Cir.

1988).

 

15Bruneau v. FDIC, 981 F.2d 175, 179 (5th Cir. 1992) (noting

that "[t]o determine whether a statute has preemptive force,

there must be evidence of "`the clearly manifested intent of

Congress"' that such preemption occur." (quotations omitted)),

cert. denied, 113 S. Ct. 2413 (1993).

12

a purely legal one and if consideration of the argument is

necessary to avoid a miscarriage of justice."14 In light of the

importance of clarifying the extent to which candidates for federal

office may be held personally liable for the debts of their

campaign committees, the legal nature of that issue, the thorough

briefing given the issue by both parties, and the extensive

interest that has been evidenced in the outcome of this case, we

have elected in this exceptional case to exercise our broad

discretion by reversing our ordinary practice and considering

Thornburgh's preemption argument. Our extraordinary decision to do

so here should not be mistaken as any relaxation of our virtually

universal practice of refusing to address matters raised for the

first time on appeal. 

To bolster his argument that FECA expressly preempts state

law, Thornburgh relies on 2 U.S.C. § 453: "[T]he provisions of

this Act, and the rules prescribed under this Act, supersede and

preempt any provision of State law with respect to election to

federal office." Thornburgh insists that here Congress expressly

stated its intent that federal law preempt state law,15 so that the

court's sole task is to "`identify the domain expressly pre-
 

16Weber v. Heaney, 995 F.2d 872, 875 (8th Cir. 1993)

(quoting Cipollone v. Liggett Group, Inc., 112 S. Ct. 2608, 2618

(1992)).

 

17Id.

 

18Stern v. General Elec. Co., 924 F.2d 472, 475 n.3 (2d Cir.

1991); see Weber, 995 F.2d at 876 ("§ 453 could be read narrowly,

referring primarily to candidates' behavior, and preempting state

laws regarding contributions only to the extent the federal law

prohibited certain kinds of contributions."); see, e.g., Weber,

995 F.2d at 877 (§ 453 preempts state laws establishing systems

for campaign funding and expenditures); Stern, 924 F.2d at 475-76

(FECA does not preempt state law governing whether corporate

political contributions were actionable as corporate waste);

Reeder v. Kansas City Bd. Of Police Comm'rs, 733 F.2d 543, 545-46

(8th Cir. 1984) (§ 453 does not preempt state law forbidding

officers from contributing to federal campaigns); see also

Friends of Phil Gramm v. Americans for Phil Gramm in '84, 587 F.

Supp. 769, 772 (E.D. Va. 1984) (§ 432 preempts state-law cause of

action alleging unauthorized use of candidate's name in

committee's name).

 

19FEC, Advisory Opinion 1989-2, 1989 WL 168490 (F.E.C. Apr.

25, 1989) ("The Commission has long held that State law governs

whether an alleged debt in fact exists, what the amount of the

debt is, and which persons or entities are responsible for paying

a debt."). Although admittedly this statement is dicta, we

nonetheless believe that it provides an important insight into

13

empted.'"16

Although Thornburgh attempts to stretch § 453 far enough to

create a preemptive bar to applying state law to hold federal

candidates personally liable, we cannot read FECA as extending that

far. First, a "strong presumption" exists against preemption,17 and

"courts have given section 453 a narrow preemptive effect in light

of its legislative history."18 In addition, nowhere in the text of

FECA or accompanying regulations is the personal liability of a

candidate addressed. Finally, the Federal Election Commission

("FEC") has opined that state law supplies the answer to the

question who may be held liable for campaign committee debts.19
how the agency charged with enforcing FECA views the extent of

that Act's preemptive effect on candidates' liability for

campaign debts.

 

20A similar result was reached by the Maryland Court of

Appeals in Parker v. Junior Press Printing Serv., Inc., 296 A.2d

377 (Md. 1972). In Parker, an unsuccessful candidate for

Congress argued that the Maryland Fair Election Practices Code

("Election Code"), a law that established campaign finance rules

similar to those of FECA, insulated candidates from incurring

personal liability for campaign debts. The court rejected the

candidate's contention, finding that the Election Code was not

intended to immunize candidates from personal liability; rather,

its purpose was to regulate and control campaign financing and to

insure centralized responsibility for campaign funds and

expenditures.

 

21Stern, 924 F.2d at 475-76.

 

22Orloski v. FEC, 795 F.2d 156, 163 (D.C. Cir. 1986).

14

Accordingly, in light of the FEC's view, the strong presumption

against preemption, the historically narrow reading of § 453, and

FECA's silence on the issue of candidate liability, we conclude

that Thornburgh's argument for express preemption must fail.20

Thornburgh also claims conflict preemption, i.e., that state

law cannot be enforced if it stands as an obstacle to the

accomplishment of a federal purpose21))one of which under FECA is,

according to Thornburgh, to separate a federal candidate from the

raising and disbursing of funds for his campaign. The primary

purpose of FECA, however, is to regulate campaign contributions and

expenditures in order to eliminate pernicious influenceSQactual or

perceivedSQover candidates by those who contribute large sums,22 not

to prevent candidates from spending their own money to get

themselves elected. In fact, FECA merely requires that candidates

reveal how much of their own money they spend; it does not keep a
15

candidate from spending his own money on his own campaign for

federal office or limit the amount that he may spend. We therefore

reject Thornburgh's second preemption contention that the

application of state law in this case obstructs FECA's purposes,

thereby creating conflict preemption.

b. Federal Common Law & Other States' Laws

To govern the liability of candidates for federal office for

the contractual debts of their principal campaign committees, the

RNC entreats us to abandon state law in favor of what, in essence,

would amount to a federal common law. The RNC argues that such a

radical approach is necessary because the application of state law

to the facts of this case would jeopardize two vital and related

federal interests: (1) attracting candidates to seek federal

elective office, and (2) ensuring the vigor of the entire federal

electoral process itself. As federalism imparts to all states a

duty not to interfere with preeminent federal policy, the RNC

entreats, we should interpret state law in a manner that will least

affect these federal interests. 

The RNC contends that citizens will be discouraged from

seeking federal office if, as candidates, they can be held liable

under state law for the debts incurred by their campaign

committees. As this case illustrates, the RNC continues, modern

campaigns involve significant amounts of money and require a wide

range of services that often must be procured from numerous vendors

scattered throughout the country. Consequently, deduces the RNC,

if each state's law is applied to determine whether a candidate for
16

federal office is liable for debts incurred in that state by his

campaign committee, then the candidate will be exposed to a

"nightmarish specter" of liability, and will run the risk of being

haled into court in any state to answer under each state's

substantive law.

The RNC also maintains that the application of each state's

law to determine the liability of a candidate for federal office

will harm the entire election process. The RNC posits that

applying each state's law could result in more cautious and less

informative campaigning, as the fear of personal liability might

make candidates reluctant to take advantage of the various methods

and media available to communicate their message. The RNC

perceives these policy concerns to be somewhat analogous to those

that prompted the development of the doctrine of official immunity

and thus asks us to look by analogy to immunity jurisprudence in

fashioning a federal common law rule to apply today.

The RNC does not go so far as to advocate a rule that would

immunize candidates from all liability: Rather, the RNC urges that

candidates be held liable only in circumstances "[w]here a

candidate expressly and intentionally (even if unwisely) assents to

personal liability." The RNC argues that this standard dovetails

neatly with the common law of agency as applied by some states,

which, according to the RNC, provides that neither the candidate

nor campaign officials will be held personally liable for campaign

debts except insofar as such debts are personally and specifically
 

23For this proposition, the RNC cited Decima Research v.

Cichetti, No. CV-92-0454471S, 1993 Conn. Super. LEXIS 1441 (June

4, 1993); W.H. Brewton & Sons, Inc. v. Kennedy, 110 Daily Wash.

L. Rep. 1681 (D.C. Super. Ct. 1982); Richmond

Advertising/Reinhold Assocs., Inc. v. Del Giudice, 411 N.Y.S.2d

251 (App. Div. 1978); Empire City Job Print, Inc. v. Harbord, 277

N.Y.S. 795 (1st Dept. 1935); American Art Works, Inc. v.

Republican State Comm., 60 P.2d 786 (Okla. 1936); Bloom v.

Vauclain, 198 A. 78 (Pa. 1938).

 

24O'Melveny & Myers v. FDIC, 114 S. Ct. 2048, 2052 (1994)

("`There is no federal general common law . . . .'" (quoting

Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)).

 

25Accord Kennedy, 110 Daily Wash. L. Rep. at 1684 (stating

that "the reality [of candidate liability] is not as harrowing as

the hypothetical situation which the defendants describe,"

because candidates can incorporate their committees).

 

26See e.g., TEX. ELEC. CODE ANN. § 253.092 (West Supp. 1994)

(discussing treatment of incorporated political committees under

the election code). 

17

authorized by the individual in question.23

Although mindful of the concerns raised by the RNC, we decline

its invitation either to abandon the established law of Texas or

Pennsylvania in favor of another state's law or to fabricate from

the whole cloth a new and entirely untested federal common law.24

We are not convinced that candidates for federal office are so

imperiled by the application of state law to determine their

liability for their committees' debts as to warrant either such

extreme measure.25

A candidate for federal office already has at least two

methods by which he could protect himself from personal liability

for the contracts entered into by his principal campaign committee.

First, he could incorporate his campaign committee.26 If the

committee were incorporated, then the candidate))whether or not he
 

27See Shortlidge v. Gutoski, 484 A.2d 1083, 1086 (N.H. 1984)

(explaining that candidates who incorporate their committees

become corporate shareholders, "shielded from personal liability

by the corporate entity"); see also Kennedy, 110 Daily Wash. L.

Rep. at 1684 (noting that "the Kennedy Committee was free to

incorporate. . . . [making] the personal assets of stockholders

and others . . . not reachable by creditors").

 

28Hafenbraedl v. LeTendre for Congress Comm., 213 N.W.2d

353, 354 (Wis. 1974) ("The members of such a campaign committee

can limit their individual liability if they wish by inserting

appropriate provisions in the contracts which the committee makes

with third parties."); see Cousin v. Taylor, 239 P. 96, 98 (Or.

1925) ("It is of course possible . . . that the [member] may have

expressly excluded personal responsibility . . . ."); Abrams v.

Brent, 362 S.W.2d 155, 159 (Tex. Civ. App. 1962, writ refused

n.r.e.) ("[P]ersonal liability [for an association's debts] could

be contracted against."); cf. Shortlidge, 484 A.2d at 1086 ("In

the absence of a . . . contract stipulation to the contrary, the

personal assets of each member who is liable can be reached by

creditors of the association.").

18

is a shareholder))is shielded from personal liability by the

corporate entity,27 assuming, of course, that he takes no personal

action that creates liability apart from the corporation's.

Second, a candidate could include in all contracts entered into by

his principal campaign committee a provision expressly stipulating

that the contracting party may look only to the committee and its

assets for compensation,28 thereby eschewing the candidate's

personal liability, either directly or indirectly. 

The test of time, we believe, confirms that these options are

sufficient to protect candidates. Independent of the briefs filed

with this court, our research has revealed remarkably few cases in

which vendors have sought to hold candidates, or the officers of

campaign committees for that matter, liable for the debts of the

committee. We find this particularly noteworthy in light of the

significant number of elections held periodically and the huge sums
 

29See, e.g., Optima Direct, Inc. v. Thornburgh, No. CA 93-

0464 (D.D.C. filed Mar. 1993, dismissed Apr. 26, 1994 upon

plaintiff's motion).

 

30See Planned Parenthood v. Casey, 112 S. Ct. 2791, 2808-09

(1992). 

19

spent in such campaigns. We speculate that those few vendors who

do not insist on payment in full in advance simply assume the risk

of nonpayment, especially from losing candidates, lest such vendors

acquire an undesired reputation within the political industry.

Also, we gather that some losing candidates, looking ahead to

possible future campaigns, seek to avoid an equally unsavory

reputation in that industry by paying the financial obligations

incurred by their campaign committees. Thus, there is a dearth of

caselaw on the subject.29 

We are not convinced that any of the traditional reasons for

abandoning settled law is present here. Applying state law has not

heretofore proved to be significantly unworkable or inequitable.

Courts have not abandoned this approach; neither have the

circumstances surrounding the liability of candidates generally so

changed of late as to rob this approach of its past relevance or

justification.30 Although the RNC argues that the application of

state law to determine a candidate's liability exposes him to a

"nightmarish" specter of liability and lawsuits, these precise

concerns were raised in dissent and rejected by the majority when

the question was considered by the Tennessee Court of Appeals more

than thirty-five years ago:

It is now a matter of general knowledge that a state-wide race

for public office, either in a primary or general election,
 

31Rich Printing Co. v. Estate of McKellar, 330 S.W.2d 959,

960 (Tenn. Ct. App. 1959) (Carney, J., dissenting).

 

32See Walker v. Armco Steel Corp., 446 U.S. 740, 745 (1980)

(discussing Erie R.R. v. Tompkins, 304 U.S. 64 (1938)); Ayo v.

Johns-Manville Sales Corp., 771 F.2d 902, 909 n.4 (5th Cir. 1985)

("[W]hen a federal court exercises diversity jurisdiction, the

court must apply the law of the forum state . . . and when the

state court has spoken . . . clearly . . . we are bound to follow

that ruling."); Turknett v. Keaton, 266 F.2d 572, 572 (5th Cir.

1959) (per curiam) (stating that in diversity case, federal

courts cannot alter settled law of forum state regardless of

modern trend in other jurisdictions).

20

requires the expenditure of many, many thousands of dollars

through many different hands for many different

purposes. . . . Obviously, the candidate himself cannot

supervise all of these many activities and many others not

mentioned above, though he knows and intends that they will be

done for him in behalf of his candidacy. In my humble opinion

it would not be in the public interest to saddle upon every

candidate for state-wide office a potential liability of so

many thousands of dollars and the possibility of multiple

claims against him with such limited opportunity to protect

and indemnify himself against such liability.31

Finally, we remain cognizant of the salient fact that this

case is before us on diversity jurisdiction. We therefore sit as

an Erie court, relegated to applying the applicable state law to

the facts before us; federalism instructs us that it is not our

place within the constitutional firmament to conjure up a new legal

paradigm to replace one already fashioned by our learned colleagues

in the state judiciary, or to supplant their considered judgment

with that from another state.32 Accordingly, contrary to the RNC's

exhortation to spin new gold out of old straw, we discern this case

to burden us with a far more modest, albeit equally difficult,

task: to apply faithfully and "federalistically" the appropriate

state law to the facts of this dispute. This, of course, requires

that we next determine which state's laws to apply.
 

33Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662, 673 (W.D.

Tex. 1993).

 

34Bloom v. Vauclain, 198 A. 78, 79 (Pa. 1938) ("The

principles of law governing the responsibility of candidates and

21

2. Choice of Law

All parties concede that if state law is applicable, only the

laws of Texas or Pennsylvania could govern this case. All parties

also recognize that under such circumstances the outcome of this

appeal will be the same regardless of which of those two states'

laws we apply.33 This is because both Texas and Pennsylvania, like

the majority of the several states that have considered the issue,

have applied by analogy the common law rule governing the liability

of a member of an unincorporated nonprofit association to determine

the liability of a candidate or a campaign committee official for

conventional obligations incurred by that candidate's

unincorporated campaign committee. Accordingly, like the district

court, we will decide this appeal based on the common law as

interpreted by jurisdictions, such as Texas and Pennsylvania, that

still follow that rule.

3. The Applicable Law

a. The Law of Unincorporated Nonprofit Associations

As noted, the common law has neither applied nor created a

separate legal regime to resolve disputes concerning the liability

of persons affiliated with unincorporated political campaign

committees; rather, such disputes have been adjudicated by

analogical extension of the law of unincorporated nonprofit

associations.34 That kind of association typically includes such
officers of [campaign] committees have been before the courts,

and in all cases we have adhered to the rule laid down for

voluntary associations."); Elections Bd. v. Ward, 314 N.W.2d 120,

123 (Wis. 1982). ("[A] political campaign committee at common

law is to be treated as a voluntary association . . . ."). 

 

35See HOWARD L. OLICK & MARTHA E. STEWART, NONPROFIT CORPORATIONS,

ORGANIZATIONS, AND ASSOCIATIONS § 1, at 1 (6th ed. 1994).

 

36Bloom, 198 A. at 79; Dunlap Printing Co. v. Ryan, 119 A.

714, 716 (Pa. 1923); see also Shortlidge v. Gutoski, 484 A.2d

1083, 1087 (N.H. 1984) ("Mere membership in the association,

without more, will not generally be sufficient to attach

liability for debts incurred in the name of the association.");

WILLIAM A. GREGORY & THOMAS R. HURST, AGENCY & PARTNERSHIP 695 (1994)

("[T]he general rule is that mere membership in the association

does not result in liability."). 

 

37GREGORY & HURST, supra note 36, at 719 n.1 ("The basic theory

of the common law was that each member of the group is both a

principal and an agent as to all the other members of the

group."). 

 

38Annotation, Personal Liability of Voluntary Association

Not Organized for Personal Profit or Contract with Third Person,

41 A.L.R. 754 (1936), 7 A.L.R. 222 (1920); see 2 SAMUEL WILLISTON,

WILLISTON ON CONTRACTS § 308, at 450-51 (3d ed. 1959) (stating that

each member of an unincorporated nonprofit association is "liable

only so far as he has personally assented to the transaction in

22

entities as churches, labor unions, and social clubs.35 

Pursuant to this law, an individual is not liable for the

debts of the association merely because of his status as a member

or officer of the association.36 Rather, principles of the law of

agency are applied to the particular facts on a case by case basis

to decide whether the individual in question is liable.37

Fundamentally, a member is personally responsible for a contract

entered into by the nonprofit association only ifSQviewing him as

though he were a principal and the association were his agentSQthat

member authorized, assented to, or ratified the contract in

question.38 Both Texas and Pennsylvania have long embraced this
question"); see, e.g., Azzolina v. Order of Sons of Italy, 179 A.

201, 204 (Conn. 1935) ("[O]nly those members who authorize or

subsequently ratify an obligation are liable . . . ."); Progress

Printing Corp. v. Jane Byrne Political Comm., 601 N.E.2d 1055,

1069 (Ill. Ct. App. 1992) ("`[I]f a member of a voluntary

[nonprofit] voluntary association . . . expressly or impliedly

authorizes a transaction in which an indebtedness is incurred by

or on behalf of such association, or if he assents to or ratifies

the contract on which such liability is predicated, he is liable

as a principal for the indebtedness.'" (quoting Severinghaus

Printing Co. v. Thompson, 241 Ill. App. 35, 39 (1926)), cert.

denied, 610 N.E.2d 1275 (Ill. 1993); Victory Comm. v. Genesis

Convention Ctr., 597 N.E.2d 361, 364 (Ind. Ct. App. 1992)

("[M]embers of a not-for-profit unincorporated association are

liable for the obligations incurred by the association under a

contract if the members authorize the contract or subsequently

ratify its terms."); Wilson & Co. v. United Packinghouse Workers

of Am., 181 F. Supp. 809, 815 (N.D. Iowa 1960) ("Under the Iowa

law where members contract in the name of an unincorporated

association, they and all of their members who authorize,

approve, consent, and ratify the contract are personally liable .

. . .") (citing Lewis v. Tilton, 19 N.W. 911 (Iowa 1884)); Jim

Host & Assocs. v. Sharpe, 639 S.W.2d 784, 785 (Ky. Ct. App. 1982)

("[I]ndividual members [of a nonprofit unincorporated association

organized for political purposes] may be held liable when they

have authorized or ratified the transaction out of which the debt

arose."); Cox v. Government Employees Ins. Co., 126 F.2d 254, 256

(6th Cir. 1942) (stating that, under Kentucky law, "an individual

member of a mutual benefit association, nor organized for gain or

profit, is not liable for the debts and obligations of the

association, unless he authorizes or ratifies the transactions

out of which the obligations or contracts arose"); Krall v.

Light, 210 S.W.2d 739, 745 (Mo. Ct. App. 1948) ("[A] member of

the association who signs a contract, together with all other

members who signed, or authorized, or ratified the signing of the

contract are liable."); Shortlidge, 484 A.2d at 1086 ("[T]hose

members of a non-profit association who have authorized or

assented to, or ratified the underlying transaction and thereby

have become liable for the association's debts, are personally

liable."); Leslie v. Bendl, 759 P.2d 301, 302 (Or. Ct. App.) ("At

common law, a debt of an unincorporated association was jointly

and severally the liability of and collectible from individual

members who authorized or ratified the acts which resulted in the

debt."), cert. denied, 767 P.2d 75 (Or. 1988); FDIC v. Tyree, 698

S.W.2d 353, 354 (Tenn. Ct. App. 1985) ("Members of [a nonprofit]

association may be liable on contracts . . . of the association

when the members have given their assent or subsequently ratified

the contract."); see also Elections Bd. v. Ward, 314 N.W.2d 120,

123 (Wis. 1982) ("`Each member of a voluntary association is

liable for the debts thereof if incurred during his period of

23
membership and contracted for the purpose of carrying out the

objects for which the association was formed.'" (quoting Vader v.

Ballou, 139 N.W. 413 (Wis. 1913)).

 

39See Bloom, 198 A. at 79; Wortex Mills, Inc. v. Textile

Workers Union of Am., 109 A.2d 815, 822 (Pa. 1954) ("Officers and

individual members of . . . [an] unincorporated association are

liable for acts which they individually commit or participate in

or authorize or assent to or ratify."); Dunlap Printing Co., 119

A. at 716 ("`The members of unincorporated associations . . . are

individually liable for the debts of the organization which they

contract, or authorize.'" (quoting Franklin Paper Co. v. Gorman,

76 Pa. Super. 276, 280 (1921)); Cox v. Thee Evergreen Church, 836

S.W.2d 167, 170 (Tex. 1992) ("In regard to contracts, members

incurring the debt on behalf of the association or assenting to

its creation were personally liable."); Abrams v. Brent, 362

S.W.2d 155, 159 (Tex. Civ. App. 1962) ("[I]t is held that members

of an unincorporated religious association who incur a debt for

the association or who assent to its creation are personally

liable therefor."); see also Reading Co. v. City of Phila., No.

91-CV-2377, 1992 WL 392595, at *6 (E.D. Pa. Dec. 17, 1992)

("[U]nder Pennsylvania law, the officers or individual members of

unincorporated associations are liable for the acts which they

individual commit or to which they contribute or authorize or

ratify.")

 

402 WILLISTON, supra note 38, § 308, at 449 (contrasting

liability of members of nonprofit unincorporated associations

with that of unincorporated associations organized for profit);

see 6 AM. JUR. 2D Associations & Clubs § 46, at 478-79 (1963); 7

C.J.S. Associations § 31, at 77 (1980). 

24

rule.39 In searching for the correct result it is important to

remember at all times that this standard differs from the one that

governs the liability of members of unincorporated associations

organized for profit or to conduct a business, which standard

determines liability of members under principles of partnership

law, rather than the law of agency.40 

b. The Rationale for Holding Members of Unincorporated

Nonprofit Associations Liable for Contracts Entered

into by the Association

At common law it was necessary to hold certain members of an

unincorporated association personally liable for the association's
 

41See Cox, 836 S.W.2d at 169-70 ("Historically,

unincorporated associations were not considered separate legal

entities and . . . a judgment could not be rendered against such

an association."); Hutchins v. Grace Tabernacle United

Pentecostal Church, 804 S.W.2d 598, 599 (Tex. App.))Houston [1st

Dist.] 1991) ("An unincorporated association is not liable on its

contracts . . . ."); see also 7 TEX. JUR. Associations & Clubs §

10 (3d ed. 1980) ("[I]n the absence of statute, an unincorporated

association is not a legal entity, contracts entered into its

association name do not render it subject to liability, and such

contracts are regarded as those of individual members who

authorized or ratified the contract." (footnotes omitted)).

 

42See Cousin v. Taylor, 239 P. 96, 97 (Or. 1925); Smith &

Edwards v. Golden Spike Little League, 577 P.2d 132, 133 (Utah

1978).

 

43TEX. R. CIV. P. 28 ("Any . . . unincorporated association .

. . may sue or be sued in its . . . common name for the purpose

of enforcing for or against it a substantive right."); see also

Cox, 836 S.W.2d at 171 & n.5 (same).

 

44Spica v. International Ladies Garment Workers' Union, 130

A.2d 468, 477 (Pa. 1957) (noting that by statute, Pennsylvania

"made unincorporated associations subject to suit").

25

contracts to protect third parties with whom the unincorporated

association dealt. This was because an unincorporated association

was not recognized as a juridical entity and thus could not be held

liable for contracts entered into in its name.41 Consequently, when

a member contracted for services on behalf of an unincorporated

nonprofit association, the common law treated that member as though

he had represented himself to be the agent of a nonexistent

principal. Under the law of agency, such a putative agent was and

is held liable for the contract entered into on behalf of the

nonexistent principal.42 

In the modern era, Texas,43 Pennsylvania,44 and many other
 

45OLICK & STEWART, supra note 35, § 446 at 1363 & n.141; see,

e.g., Hartford Accident & Indem. Co. v. Sena, 619 A.2d 489, 494

(Conn. Super. Ct. 1992); Elections Bd. v. Ward, 314 N.W.2d 120,

123 (Wis. 1982) ("[B]y the Laws of 1959, . . ., the Wisconsin

legislature explicitly recognized that unincorporated

associations may be suable entities." (citation omitted)).

 

46Jim Host & Assocs. v. Sharpe, 639 S.W.2d 784, 785 (Ky. Ct.

App. 1982) ("We do not view the fact that an unincorporated

26

states,

45 have enacted statutes permitting unincorporated

associations to sue and be sued. In many of these "entity" states,

third parties who contract with unincorporated nonprofit

associations may now pursue a cause of action against the assets of

the association itself. In such jurisdictions, therefore, a member

of an association who enters into a contract on behalf of the

association is not contracting for a nonexistent principal. One

could argue, therefore, that it is no longer necessary or even

appropriate for the laws of these jurisdictions to permit third

parties to sue individually the members of an association for the

contract debts incurred by the association in its own name. The

argument would go as follows: The third party is no longer being

misled or deceived about a nonexistent principal; such a party is

contracting with a disclosed, juridical entity, the assets of which

can be reached to satisfy any debt that the association may owe.

As appealing and logical as that argument might appear,

however, that is not the way the law has developed. The courts of

the states that have adopted statutes permitting suit against

unincorporated associations have not altered or supplanted the

preexisting common law rule governing the personal liability of

association members.46 The courts of both Pennsylvania and Texas
association has been held to have `sufficient legal entity' to be

sued . . . as in any way modifying established common law

principles regarding the liability of individual members of such

an association for its debts."); Shortlidge v. Gutoski, 484 A.2d

1083, 1087-88 (N.H. 1984) ("We find that [the statute] permitting

an association to be sued in its assumed name, does not preclude

a plaintiff from pursuing his common law right to proceed against

each individual member of the association." (citing cases));

Leslie v. Bendl, 759 P.2d 301, 302 (Or. Ct. App. 1988) (stating

that statute permitting association to be sued in its own name

"cannot modify the substantive individual liability of the

members").

 

47See, e.g., Kerney v. Fort Griffin Fandangle Ass'n, 624

F.2d 717, 720 (5th Cir. 1980) ("Texas law permits entity suits

against unincorporated associations, [but] it specifically

provides that the grant of entity status does not `affect nor

impair . . . the right of any person to sue the individual

stockholder or members.'" (quoting TEX. REV. CIV. STAT. ANN. art.

6138 (Vernon 1976))); Wortex Mills, Inc. v. Textile Workers Union

of Am., 109 A.2d 815, 822 n.3 (Pa. 1954) (stating that statutes

permitting suit against associations eo nomine did not alter the

"applicable principles of substantive law holding members of an

unincorporated association individually liable upon claims

against the association").

27

have continued to hew to this line.47

c. Problems With Applying the Law of Unincorporated

Nonprofit Associations to Political Campaign

Committees

Not surprisingly, borrowing from the law of unincorporated

nonprofit associations to resolve disputes involving unincorporated

campaign committees has presented some practical difficulties.

Churches and social clubs often have bylaws or other instruments of

governance that outline how the particular organization is going to

be operated. For example, such documents typically describe the

formalities by which one may become a member of the organization,

or by which the association may enter into contracts with a third
 

48See OLICK & STEWART, supra note 35, §§ 63-64, at 170-90

(describing various methods and documents that may be used to

establish an unincorporated nonprofit associations).

28

party.48 As a result, many such associations maintain membership

rosters or attendance records of group gatherings and meetings; and

frequently, prior to committing the association to a contract with

a third party, poll the membership to ascertain whether a consensus

exists in support of the contemplated action. By sampling the

membership, the association thus determines the number, and often

the identity, of those members who assent to the undertaking. 

Political campaign committees typically are not organized and

operated in this manner because they are usually formed for limited

purposes and short durations. The typical political campaign

committee does not have bylaws; does not create or maintain a

"membership" roster (assuming that "membership" is even a proper

concept in the context of a political campaign committee); and does

not consult its "members" every time the committee incurs a

contractual obligation. Accordingly, as the instant case

illustrates, the law of unincorporated nonprofit associations can

be less than ideally suited to determine precisely who may be held

accountable for the contractual debts incurred by an unincorporated

campaign committee. Nonetheless, it is our task to resolve the

instant controversy based on this body of law.

B. LIABILITY OF THORNBURGH FOR THE SEPTEMBER CONTRACT WITH THE COMMITTEE

There is no dispute that Rove & Company and the Committee were

the only nominate parties to the September Contract; both the

language of the instrument and the intent of all parties are clear.
 

49Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662, 667 n.7

(W.D. Tex. 1993). 

29

As the district court properly concluded, and the parties do not

contest on appeal, the Committee is liable for all amounts owed

Rove & Company under that agreement. 

Again, the only issue before us is whetherSQin addition to the

CommitteeSQThornburgh, or in the alternative, Dimuzio, is jointly

and severally liable with the Committee for its contractual debt.

To answer this question, we must ascertain whether either man

personally, or through his agent, authorized, assented to, or

ratified the September Contract. 

In holding Thornburgh liable, the district court found that he

had assented to the September Contract. On appeal, Thornburgh

proffers two arguments why this conclusion was wrong. He first

argues that he was never a member of the Committee and, he

contends, only "members" or officers of the Committee can assent

to, authorize, or ratify Committee contracts. Second, Thornburgh

asserts that, even if he were deemed to be a "member" of the

Committee or otherwise had the capacity to incur personal liability

for the Committee's debts, he did nothing that could rise to the

level of an assent to this agreement. We address each argument in

turn.

1. Thornburgh's Capacity to Assent

The district court found that "the law provides for personal

liability if a member or officer or candidate authorizes, assents

to, or ratifies a committee transaction."49 Thornburgh challenges
 

50See FEC, Advisory Opinion 1989-2, 1989 WL 168490 (F.E.C.

Apr. 25, 1989) ("The Commission has long held that State law

governs whether an alleged debt in fact exists, what the amount

of the debt is, and which persons or entities are responsible for

paying a debt."); cf. Kerney, 624 F.2d at 720 (stating that

"whether only members of the association, or only the association

itself, or both the association and its members may be held

liable for its wrongs . . . rests, as it always has, with the

state rule of decision in diversity cases").

 

51See, e.g., Wortex Mills, Inc., 109 A.2d at 822 ("Officers

and individual members of . . . [an] unincorporated association

are liable for acts which they individually commit or participate

in or authorize or assent to or ratify."); Dunlap Printing Co. v.

Ryan, 119 A.2d 714, 716 (Pa. 1923) ("`The members of

unincorporated associations . . . are individually liable for the

debts of the organization which they contract, or authorize.'" 

(quoting Franklin Paper Co. v. Gorman, 76 Pa. Super. 276, 280

(1921)); Cox v. Thee Evergreen Church, 836 S.W.2d 167, 170 (Tex.

1992) ("In regard to contracts, members incurring the debt on

behalf of the association or assenting to its creation were

personally liable."); see also Reading Co. v. City of Phila., No.

91-CV-2377, 1992 WL 392595, at *6 (E.D. Pa. Dec. 17, 1992)

("[U]nder Pennsylvania law, the officers or individual members of

unincorporated associations are liable for the acts which they

individual commit or to which they contribute or authorize or

ratify.").

30

this statement of the law, claiming that under the law governing

unincorporated nonprofit associations only "members" or "officers"

of the association have the legal capacity to incur personal

liability for its debts.

Again, state law answers the question, "who may be held

responsible for the debts of an unincorporated political campaign

committee?"50 In decisions addressing the liability of individuals

for the debts of such committees, state courts have frequently

recited the governing legal standard in terms of the actions of

"officers" or "members" or both.51 We do not read these cases,

however, to exclude the capacity of the candidate qua candidateSQby

his own actsSQto become liable for the debts of his designated
 

52198 A. 78 (Pa. 1938).

 

53Id. at 79 (emphasis added).

 

54601 N.E.2d 1055 (Ill. Ct. App. 1992).

 

55387 So. 2d 209 (Ala. Civ. App.), cert. denied, 387 So. 2d

213 (Ala. 1980).

 

56110 Daily Wash. L. Rep. 1681 (D.C. Super. Ct. 1982).

 

57Jane Byrne Political Comm., 601 N.E.2d at 1069 ("[L]ike

any member of a voluntary association who knows, or should have

known under the circumstances, that a transaction has occurred

31

principal campaign committee. To the contrary, many of these cases

implicitly recognize that candidates have such capacity.

In Bloom v. Vauclain,

52 for example, the Pennsylvania Supreme

Court drew no distinction among candidates, members, and officers

in its discussion of the rule governing the liability of

individuals for the debts of campaign committees:

The principles of law governing the responsibility of

candidates and officers of such committees have been before

the courts, and in all cases we have adhered to the rule laid

down for voluntary associations. The mere fact that one is a

candidate, an officer, or a member of a political organization

does not, of itself, establish his liability, personally or

otherwise, for debts incurred by that organization. . . . But

those who make a contract, not forbidden by law, are

personally liable, and all are included in such liability who

assented to the undertaking.53

Likewise, in Progress Printing Corp. v. Jane Byrne Political

Committee,

54 Hunt v. Davis,55 and W.H. Brewton & Sons, Inc. v.

Kennedy,

56 state courts discussed the potential personal liability

of the candidate in a manner reflective of the fact that those

courts drew no distinction among the respective capacities of the

candidate, a member, and an officer of the committee, to incur

liability for a campaign committee's debts.57 
and who then accepts its benefits for herself, the candidate here

may be held liable for the [campaign] Committee's debts."

(emphasis added)); Hunt, 387 So. 2d at 211 (noting that

individual liability will attach only if a member, "here the

candidate," authorized or ratified the transaction); Kennedy, 110

Daily Wash. L. Rep. at 1681, 1686 (D.C. Super. Ct. 1982) (finding

that the committee "does not have . . . members," but that

Kennedy nonetheless could be held liable if the evidence showed

that "he authorized or ratified the obligation in a manner that

reasonably implicated his personal credit").

 

58In FDIC v. Morrison, Nos. 85-5272, 85-5273, 1987 WL 37065

(6th Cir. Apr. 14, 1989) (table opinion at 816 F.2d 679), Randy

Tyree, a candidate for governor, argued that, because he was not

a member of the unincorporated campaign committee "Tennesseans

for Tyree" he could not be held personally liable for a

promissory note executed by P. Douglas Morrison as chairman of

that committee. The Sixth Circuit implicitly rejected this

argument, as it reversed a district court judgment granting

summary judgment in favor of Tyree. In its opinion, the Sixth

Circuit noted that summary judgment was inappropriate as two

questions of material fact existed: whether Tyree (1) was a

"member" of the committee and (2) ratified the note.

The Sixth Circuit remanded the case to the district court,

which then ruled that Tyree was not liable as he neither ratified

nor agreed to be held personally liable for the note. The Sixth

Circuit affirmed this decision in FDIC v. Tennesseans for Tyree,

886 F.2d 771 (6th Cir. 1989). The Sixth Circuit found that Tyree

did not ratify the note, as under Tennessee law, to receive a

"benefit" from a loan, the loan must be used to increase money in

hand or to extinguish personal liabilities. Id. at 775.

32

In fact, we have uncovered only one other case in which the

question of a candidate's capacity to assent to a contract of his

campaign committee was even raised.58 The opinion in that case is

unclear whether the committee in question was the candidate's

principal campaign committee; and we are aware of no decision in

which a court has held in favor of a candidate based on a finding

that he lacked the capacity to incur liability for his principal

campaign committee's debts.

Thornburgh offers no legal foundation to support his

conclusionary assertion that courts should fashion a rule that
 

59See FEC v. Gus Savage for Congress '82 Comm., 606 F. Supp.

541, 546-47 (N.D. Ill. 1985) (commenting that this aspect makes

FECA "perhaps the most ingeniously unfair piece of legislation

ever enacted by Congress"). 

33

would insulate the candidate (but not the members and officers of

his committee) from personal liability for the debts incurred by

the candidate's principal campaign committee. Query whether any

reasonable explanation even exists, given that such a rule would

appear to defy both logic and equity. To hold that candidates do

not have capacity to incur liability for the debts of their

principal campaign committees but that members and officers do

could very well lead to perverse and anomalous results: Campaign

committee officers and members could incur personal liability for

campaign committee debts by assenting to or ratifying such debts

but the candidate, for whose election the officers and members

labor, could not. Although we recognize that Congress has

constructed a somewhat analogousSQand anomalous59SQlegal regime to

shield candidates from liability for violations of FECA, absent

express direction from that branch, we decline to extend further

such an apparently inequitable rule.

 As the district court concluded that a candidate qua candidate

does have the capacity to incur personal liability, the court was

not required to make))and thus did not make))a specific ruling

whether Thornburgh was a "member" of the Committee. We agree with

the district court's conclusion of law as to a candidate's capacity

to incur liability, but we also are satisfied that, as a matter of

fact, Thornburgh was a "member" of the Committee. At the very
 

60IND. CODE ANN. § 3-9-1-8 (West 1994) ("A candidate is an ex

officio member of the candidate's committee."); see Victory Comm.

v. Genesis Convention Ctr., 597 N.E.2d 361, 363 (Ind. Ct. App.

1992) ("[Indiana] law unequivocally defines the status of

[candidate] and [campaign treasurer] as members of the [campaign]

Committee.").

 

61Pennsylvania law requires only that a campaign committee

identify its treasurer and chairman. PA. STAT. ANN. tit. 25,

§ 3242 (1992) (organization of political committees). FECA

requires that a candidate's principal political committee

identify its treasurer. 2 U.S.C. § 432(a). Texas requires that

candidates for federal office comply with federal law, i.e.,

identify their treasurers. TEX. ELEC. CODE ANN. § 251.006 (West

Supp. 1994) (Federal Office Excluded). 

 

62We do note that some other states provide that a candidate

has broad authority over his committee and its members. See,

e.g., MO. ANN. STAT. § 130.011(7)(b) (Vernon 1994) ("A committee

is presumed to be under the control and direction of an

individual candidate . . . unless the candidate files an

affidavit . . . stating that the committee is acting without

control or direction on his part . . . ."); UTAH CODE ANN. § 20-14-

3 (1994) (stating that the "candidate may revoke the selection of

any member of the campaign committee").

34

least, Thornburgh's active participation in the Committee's

activities estops him from denying membership in the Committee. 

The record contains no Committee membership roster or list, a

fact we do not find particularly surprising in light of the nature

of political campaign committees. Although the Indiana legislature

enacted a provision specifically stating that a candidate is an "ex

officio member" of his own campaign committee,60 neither Congress

nor Pennsylvania or Texas lawmakers have been so accommodating.61

Neither are we aware of any other such legislation.62 Finding

little guidance from the Committee's documents or applicable state

statutes, we next examine state common law to determine whether
 

63See, e.g., Hafenbraedl v. LeTendre for Congress Comm., 213

N.W.2d 353 (Wis. 1974) (applying common law definition of an

unincorporated association and finding it a "fair inference,"

under liberal construction of plaintiff's complaint, that

chairman, treasurer, and manager of political campaign committee

were "members" of the committee); cf. Arlington v. Juhl, 883

S.W.2d 286 (Tex. Ct. App.))El Paso 1994) (applying common law

definition to determine whether group of abortion protesters were

an "unincorporated association").

 

64Reading Co. v. City of Phila., No. 91-CV-2377, 1992 WL

392595, at *6 (E.D. Pa. Dec. 17, 1992) (citing Selected Risks

Ins. Co. v. Thompson, 552 A.2d 1382 (Pa. 1989)); see Cox v. Thee

Evergreen Church, 836 S.W.2d 167, 169 (Tex. 1992) ("An

unincorporated association is a voluntary group of persons,

without a charter, formed by mutual consent for the purpose of

promoting a common enterprise or prosecuting a common

objective."); see also OLICK & STEWART, supra note 35, § 11, at 33

(defining unincorporated association as a "body of people united

in purpose and acting together, usually with a formal charter").

 

657 C.J.S. Associations § 19, at 54. 

 

66Id. 

 

67Id.; see Lunsford v. City of Bryan, 292 S.W.2d 852, 854

(Tex. Civ. App. 1956) ("Membership is a question of fact."),

rev'd on other grounds, 297 S.W.2d 115 (Tex. 1957).

35

Thornburgh was a member of his own principal campaign Committee.63

Under both Texas and Pennsylvania law, an "unincorporated

association" is defined generally as "a body of individuals acting

together for the prosecution of a common enterprise."64 As such

entities typically are loosely organized, written formalities are

not required for membership; a person joins an association

when))either expressly or tacitly))he is accepted as, and agrees to

become, a member.65 The intent of both parties, the putative member

and the association, is what governs.66 Whether a person is a

member of an association is a question of fact.67

Thornburgh testified conclusionally that he was not a member
 

68See Libby v. Perry, 311 A.2d 527, 531 (Me. 1973) (stating

that "proof of participation in its organization, meetings, and

activities," is sufficient to support finding that persons

accepted membership in an unincorporated nonprofit association);

Francis v. Perry, 144 N.Y.S. 167, 173 (Oneida County Ct. 1913)

(considering acts by alleged member to determine intent and

understanding of parties regarding his status in the

association).

 

69We are aware of only two decisions where courts found that

a candidate for federal office was not a member of his campaign

committee. Neither finding was relevant to the resolution of

either case. See Pittman v. Martin, 429 So. 2d 976 (Ala. 1983)

(reversing trial court's summary judgment in favor candidate for

the U.S. Senate in wrongful death action arising out of aircraft

accident during campaign); W.H. Brewton & Sons, Inc. v. Kennedy,

110 Daily Wash. L. Rep. 1681 (D.C. Super. Ct. 1982) (expressly

finding that committee "does not have . . . members," but

concluding nonetheless that candidate still could be held

liable).

36

of the Committee. Circumstantial evidence, however, may be

considered to determine whether a person acted in a manner evincing

membership.68 In the instant case, we are satisfied that such

evidence compels the conclusion that both Thornburgh and the

Committee contemplated his membership.

The Committee was formed for the sole purpose of promoting

Thornburgh's senatorial candidacy during Pennsylvania's 1991

special election))obviously an objective shared by Thornburgh

himself. As Thornburgh and the Committee shared this common goal,

the only open question remaining is what was the intent of each

party, i.e., did Thornburgh intend to associate voluntarily with

the Committee and did the Committee approve of his affiliation,

either expressly or implicitly. Based on the record before us, we

believe that the evidence strongly supports affirmative answers to

both questions.69
 

70See FEC v. Florida for Kennedy Comm., 681 F.2d 1281, 1287

(11th Cir. 1982) (finding that candidate did not control

committee organized to promote his candidacy); Friends of Phil

Gramm v. Americans for Phil Gramm in '84, 587 F. Supp. 769, 771

(E.D. Va. 1984) (suit brought by congressman and his official

campaign committee to stop an independent political action

committee from raising funds in the name, and on the behalf, of

the congressman's election to U.S. Senate).

 

71See Florida for Kennedy Comm., 681 F.2d at 1282 (noting

that before entering the race, the candidate "specifically

disavowed [the committee's] activities"; Friends of Phil Gramm,

587 F. Supp. at 771. 

 

722 U.S.C. § 431(5) (defining the principal campaign

committee as the committee "designated and authorized by a

candidate" to receive contributions or make expenditures on the

candidate's behalf); see 25 PA. CONS. STAT. ANN. § 3243 (1994)

(providing that a political committee cannot receive

contributions until "authorized in writing by the candidate"). 

This provision gives the candidate the ultimate control over

whether a committee can enter into contracts to promote his

candidacy.

37

We note initially that a candidate is not necessarily a member

of any committee established to promote his election. We are aware

of two instancesSQand there are likely moreSQin which candidates

were completely uninvolved with, and in one case even opposed to,

the efforts of committees ostensibly organized to support their

candidacy for federal office.70 In both cases, however, the

candidates made clear that they had no intention of affiliating

with the committees.71 This, however, is not such a case.

The instant record is replete with evidence that Thornburgh

and the Committee voluntarily chose to associate with one another.

Thornburgh designated the Committee as his one and only "principal"

campaign committee. By doing so, Thornburgh expressly sanctioned

the Committee as the only organization authorized to receive and

expend contributions on his behalf.72 He campaigned extensively in
 

737 C.J.S. Associations § 19, at 54 (citing Electrical

Contractors' Ass'n v. A.S. Schulman Elec. Co., 63 N.E.2d 392, 397

(Ill. 1945) (defendant corporation sent representative to

meetings of, and paid dues to, association); Francis v. Perry,

144 N.Y.S. 167, 173 (Oneida County Ct. 1913) (defendant attended

meeting, was elected as member, voted at meetings, and became an

officer of and made payments to the association)); see also Hann

v. Nored, 378 P.2d 569, 574-75 (Or. 1963) (considering, but not

deciding, whether a person was a member, where the person paid

dues to and attended two meetings and was listed on the mailing

list of the association).

38

concert with employees of the Committee; spoke almost daily with

Committee employees who were supporting his candidacy; and actively

facilitated contracts entered into by the Committee (as noted, for

example, Thornburgh reviewed and approved several vignettes

appearing in fundraising letters for the September Contract, and

facilitated its performance by providing a signature exemplar and

his personal mailing lists). AndSQin the words of MasonSQThornburgh

was "ultimately in control" of the entire campaign, including all

activities undertaken by the Committee. For any reasonable finder

of fact, these would establish Thornburgh's membership in the

Committee beyond cavil. 

Even absent a finding that Thornburgh's activities with the

Committee were sufficient to evince his intent to affiliate with

that organization as a "member," based on these same interactions

Thornburgh would have to be estopped from now denying his

membership in the Committee. "[A] person may be estopped from

denying membership in an association, particularly where there has

been active participation in its activities."73 It seems clear to

us that this rule applies with particular force when, as here, the

candidate's sole purpose in claiming estrangement from the
 

74Inapposite to the instant case are decisions discussing

whether a person or entity is a "member" of an association, where

the association has established particular requirements for

membership. See, e.g., NLRB v. J.D. Indus. Insulation Co., 615

F.2d 1289, 1292-94 (10th Cir. 1980) (reversing NLRB finding that

company was estopped from denying membership in national

association, where company did not file an application for

membership, pay an initiation fee, or appear on membership list);

United Nuclear Corp. v. NLRB, 340 F.2d 133, 136-37 (1st Cir.

1965) (where labor union constitution imposes requirements for

membership, membership will not be inferred by the acts of

attending meetings and voting).

 

75BLACK'S LAW DICTIONARY 115 (6th ed. 1991).

39

committee is the evasion of personal liability for the committee's

debts,74 especially where such claim is proffered post hoc. 

As the facts of this case compel the conclusion that

Thornburgh had the capacity to incur personal liability for the

debts of the Committee, we next consider whether he did so.

2. Thornburgh Assented to the September Contract

For Thornburgh to be held liable for the September Contract,

the evidence must show that he, or his agent for him, authorized,

assented to, or ratified that agreement. The district court found

that Thornburgh assented to the September Contract. We agree.

As a general proposition in the context of the law of

unincorporated nonprofit associationsSQand thus unincorporated

political committeesSQ"assent" connotes "approval" and is roughly

equivalent to authorization.75 Assent can be express or tacit. To

manifest tacit assent to a contract through conduct, one must

"[intend] to engage in the conduct and know[] or ha[ve] reason to

know that the other party may infer from his conduct that he
 

76RESTATEMENT (SECOND) OF CONTRACTS § 19(2).

 

77Id. § 19 cmt. b.

 

78Bloom v. Vauclain, 198 A. 78, 79 (Pa. 1938) ("[E]ven if

[the member] knew [the services] were being purchased, that fact

could not be used as the basis for a presumption that he assented

and would be personally bound therefor.").

 

79JOHN D. CALAMARI & JOSEPH M. PERILLO, CONTRACTS § 2-19 (3d ed.

1987); see Progress Printing Corp. v. Jane Byrne Political Comm.,

601 N.E.2d 1055, 1069 ("`[T]he liability of the participating,

assenting or ratifying members [of a voluntary association] is

joint and several, and that is a question for the [factfinder] to

determine to whom the credit was given and whether the members

authorized or ratified the contract.'" (quoting Severinghaus

Printing Co. v. Thompson, 241 Ill. App. 35, 39 (1926) (second

alteration in original)), cert. denied, 610 N.E. 2d 1275 (Ill.

1993).

40

assents."76 "A person has reason to know a fact . . . if he has

information from which a person of ordinary intelligence would

infer that the fact in question does or will exist."77 Absent more,

however, a member's mere knowledge that his association entered

into a contract is insufficient to establish that he tacitly

assented to the contract.78 Whether a principal assented to a

transaction is a question of fact,79 a finding of which will be

reversed only if clearly erroneous.

We deem it important to remember that, when we discuss

Thornburgh's "assent to" the September Contract, we are asking only

whether Thornburgh tacitly or implicitly agreed with the

Committee's decision to contract for direct mail fundraising

services. Had he expressly agreed to become personally liable for

the September Contract, our inquiry would be at an end; we would

have no need to consider the concept of assent in the context of

unincorporated nonprofit associations. But under that concept in
 

80Summerhill v. Wilkes, 133 S.W. 492, 493 (Tex. Civ. App.

1910, no writ) (stating that member of church, an unincorporated

nonprofit association, who signed contract is responsible

individually, "although in signing the same as chairman of the

building committee it was not his intention to become

individually liable"); see also Victory Comm. v. Genesis

Convention Ctr., 597 N.E.2d 361, 365 (Ind. Ct. App. 1992)

(stating that "[t]he issue is not . . . whether [the member]

agreed to become personally liable for the debts of the

Committee. Rather, the issue is whether they assented to the

contract. If so, they became personally liable by operation of

law.").

 

81Xerox Corp. v. Rinfret, 589 N.Y.S.2d 723, 724 (N.Y. City

Civ. Ct. 1992); cf. Empire City Job Print, Inc. v. Harbord, 277

N.Y. Supp. 795 (App. Div. 1935) (stating that, even though

defendants assented to contract, they could not be held

personally liable absent a showing that they extended personal

credit); Richmond Advertising/Reinhold Assocs., Inc. v. Del

Giudice, 411 N.Y.S.2d 251 (App. Div. 1978) (applying Empire

City); see also W.H. Brewton & Sons, Inc. v. Kennedy, 110 Daily

Wash. L. Rep. 1681 (D.C. Super. Ct. 1982) (stating that candidate

would be liable upon a showing that he "he authorized or ratified

the obligation in a manner that reasonably implicated his

personal credit").

We also note that seventy-five years ago, Judge Polley in

Robbins Co. v. Cook, 173 N.W. 445 (S.D. 1919), argued in dissent

for a similar standard in a slightly different context. He

stated that members of the South Dakota Panama Pacific Exposition

Commission, an unincorporated nonprofit association organized at

the behest of the governor to finance an exhibit for the state,

should not have been held liable for a contract entered into by

that association as the members did not clearly express their

intent to incur a personal responsibility. The majority rejected

Judge Polley's argument, applied the majority rule governing

unincorporated nonprofit organizations, and held the members

liable.

41

that context, Thornburgh's liability attached by operation of law

at the time he concurred with the Committee's decision to enter

into the September Contract.80 (We are aware that some state courts

in New York have stated that members and officers are not liable

for the debts of a campaign committee "[a]s long as the members

don't intend to be personally liable."81 To the extent that this

rule may correctly state the law of New York, we note simply that,
42

regardless of whatever approval such a rule might have there or

elsewhere, it is not the legal standard in either Texas or

Pennsylvania, and we have no authority as an Erie court to change

the settled law of either state by substituting the New York rule

for those extant in Texas and Pennsylvania.)

We are therefore concerned here only with the question whether

Thornburgh acted in a manner that evinced agreement with the

Committee's decision to enter into the September Contract with Rove

& Company for direct mail fundraising services. Once that question

is posed properly, the answer becomes self-evident. The district

court concluded that through his actions Thornburgh manifested his

agreement with the Committee's decision to procure direct mail

fundraising services. In particular, the court found that

Thornburgh (1) knew that Dickman had hired some person or company

to provide direct mail services; (2) played a direct role in the

fulfillment of that contract by furnishing his signature exemplar,

by reviewing, editing, and approving drafts of fundraising letters,

and by supplying lists of names and addresses to which such

correspondence would be sent; (3) understood that the letters were

written on his behalf and that his approval meant that some

contractor had the authority to mail them; (4) knew that the funds

raised by these solicitations were, in fact, used for the sole

purpose of promoting his election; and (5) admitted that he had the

authority, if he desired, to stop such fundraising efforts at any
 

82Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662, 674-75

(W.D. Tex. 1993).

43

time.82 Based on these discrete factual findings))all of which are

supported by the record, and none of which are contested by

Thornburgh))the district court concluded that Thornburgh assented

to the Committee's decision to retain the services of a direct mail

fundraiser, Rove & Company in this instance. Whether Thornburgh

knew the identity of the fundraiser selected by the Committee is

irrelevant and immaterial. The record does not tell us that those

facts are clearly erroneous or that the district court's conclusion

based on those facts requires reversal. 

Thornburgh nevertheless insists that the district court erred

in its analysis. He objects in particular to the district court's

reliance on the fact that Thornburgh "provid[ed] signature

exemplars, review[ed] drafts, and provid[ed] a list of

contributors." He contends that, as these acts occurred for the

most part well before September 18, 1991, they had no nexus with

the September Contract. He insists, for the district court to rely

on such attenuated acts as a basis of its finding that Thornburgh

assented to that agreement is improper. As we do not agree, we do

not conclude that the district court erred in relying on this

evidence. 

We first observe that all of these prior acts anticipated and

directly facilitated the performance of direct mail solicitations

in general and the September Contract in particular. For example,

in mailings made pursuant to the September Contract, Rove & Company
 

83See id. at 675 n.21 (finding that "there was very little

variation in the different form letters . . . . Thus, once

Thornburgh had approved the content and language of a given story

or statement attributed to him, there would be no need for him to

review subsequent letters reincorporating the same substance.").

 

84See Armstrong v. Palmer, 218 S.W. 627 (Tex. Civ. App.

1920, writ refused).

 

85See RESTATEMENT (SECOND) OF AGENCY § 43(2) ("Acquiescence by

the principal in a series of acts by the agent indicates

authorization to perform similar acts in the future.").

44

used the signature exemplar and excerpts previously edited and

approved by Thornburgh.83 Evidence that a member of an association

actively facilitated the performance of a contract entered into by

the associationSQeven prospectivelySQis certainly probative of

whether that member agreed with the association's decision to enter

into that same agreement. 

As the court must determine whether Thornburgh (as principal)

assented to the contract entered into by the Committee (as his

agent), it was not error for the district court to consider

Thornburgh's actions ante-dating the September Contract. Contrary

to Thornburgh's assertions, both the prior and contemporaneous

actions of a principal can be relied on to ascertain whether the

principal approved of a particular transaction.84 Moreover, the

fact that Thornburgh cooperated in the Committee's direct mail

fundraising effort before, during, and after the Committee entered

into the September Contract strongly supports the conclusion that

he continuously approved of Rove & Company's work for the

Committee.85

Thornburgh also posits that he could not assent to a contract
 

86Recall that the district court credited Rove's testimony

that he met Thornburgh and identified himself as the person

providing the direct mail services, and that Thornburgh responded

by telling Rove that he was doing a good job and to keep up the

good work.

 

87RESTATEMENT (SECOND) OF CONTRACTS § 23 cmt. e (1981) ("An

offeree, knowing that an offer has been made to him, need not

know all its terms."); see Land Title Co. v. F.M. Stigler, Inc.,

609 S.W.2d 754, 756 (Tex. 1980) (knowledge of "transaction"

necessary for ratification); see e.g., Progress Printing Corp. v.

Jane Byrne Political Comm., 601 N.E.2d 1055, 1069 (Ill. Ct. App.

1992) (holding candidate liable for committee's contract because

"like any member of a voluntary association who knows, or should

have known under the circumstances, that a transaction has

occurred and who then accepts its benefits for herself, the

candidate here may be held liable for the Committee's debts"),

cert. denied, 610 N.E.2d 1275 (Ill. 1993); Leslie v. Bendl, 759

P.2d 301 (Or. Ct. App. 1988) (holding officer of association

liable on basis that he "knew or should have known that the

association had filed the action [and] . . . did not object to

the filing"); see also Vader v. Ballou, 139 N.W. 413 (Wis. 1913)

(holding members of a campaign committee liable for a contract

debt as they "had knowledge that this work was being done and

this material furnished, that it must be paid for, that it was

adapted to the purpose for which they had organized themselves

into a committee, and that it was a disbursement necessary to

effectual (sic) work").

45

the terms of which he did not know. In this case, however, it is

clear that Thornburgh knew the substance of the contract if not the

details: he reviewed the letters to be sent; knew they were being

prepared by a direct mail vendor; knew that the vendor was charging

for its services; and knew (or should have known) the identity of

the vendor.86 Knowledge of these facts is sufficient for Thornburgh

to be able to assent to the September Contract.87 

But even if Thornburgh's knowledge were insufficient, he

cannot shield himself from liability merely by failing to read or

otherwise familiarize himself with a contract entered into by his

agent, when as here the initial proposal and the subsequent
 

88See Pandem Oil Corp. v. McKinney, 3 S.W.2d 466 (Tex. Civ.

App. 1927, writ dismissed w.o.j.); see also Jane Byrne Political

Comm., 601 N.E.2d at 1067-68 ("[A]lthough normally a principal's

actual knowledge of the transaction is essential, one whose

ignorance or mistake was the result of gross or culpable

negligence in failing to learn the facts will be estopped as if

he had full knowledge of the facts.").

46

agreement were readily available.88 Both the initial proposal and

the September Contract were provided to Dickman, both an employee

of the Committee and Thornburgh's longtime "Man Friday." Rove sent

the initial fundraising proposal to Dickman; later, Rove provided

a copy of the September Contract to Mason, who, in turn, forwarded

the agreement to Dickman. Thornburgh was aware that the Committee

was going to obtain direct mail fundraising services and that it

had subsequently entered into an agreement to obtain such services.

Had Thornburgh desired, he easily could have obtained a copy of the

September Contract and reviewed its terms. The fact that

Thornburgh never availed himself of the opportunity))remaining

deliberately ignorant))cannot now inoculate him from personal

liability. It would be inequitable to hold otherwise: An

affiliate of an association who (1) knowingly benefits from an

association's contract, (2) directly facilitates the performance of

such contract, and (3) claims the right to terminate the activities

therein contracted for, cannot be permitted to escape personal

liability for such association's contract merely because he remains

willfully ignorant of the specific terms of the association's

agreement, the existence of which is known to him.

Thornburgh contends finally that the acts relied on by the

district court as evidencing assent constitute nothing more than
 

89OLICK & STEWART, supra note 35, § 48, at 144.

 

90W.H. Brewton & Sons, Inc. v. Kennedy, 110 Daily Wash. L.

Rep. 1681, 1686 (D.C. Super. Ct. 1982) (stating that candidate

would be liable for committee's contract if the facts show that

"he authorized or ratified the contract in a manner that

reasonably implicated his personal credit"); see W.H. Brewton &

Sons, Inc. v. Kennedy, 110 Daily Wash. L. Rep. 2222 (D.C. Super.

Ct. 1982) (denying candidate's motion to dismiss complaint, as

allegations raised issue whether candidate's actions established

actual or apparent authority).

47

ordinary interactions that any federal candidate would have with

his principal campaign committee. He argues that if such actions

are held to manifest assent to a contract, virtually every

candidate could be held to have assented to virtually every

contract entered into by his campaign committee so long as the

candidate is needed to facilitate performance of the contract. 

Like others before us, we recognize that the application of

the law governing the liability of members for the debts of their

unincorporated nonprofit association may sometimes lead to harsh or

even subjectively unintended results. In fact, one commentator has

ventured that the choice of this form of organization "usually

results from sheer ignorance of the possible degree of personal

liability of its members."89 Thus, although we do not join

Thornburgh in speculating on the extent to which future candidates

could be held liable for the debts incurred by their unincorporated

campaign committees, we are constrained to note in passing that he

is not the first candidate to be held liable or potentially liable

for his committee's debts. The list includes many widely

recognized names, including: Senator Edward Kennedy,90 Senator
 

91See Metro Printing & Mailing Servs., Inc. v. Abdnor, No.

81-0877(A) (denying motion to dismiss suit alleging Senator was

personally liable for contract entered into by his principal

campaign committee, where plaintiff submitted evidence that

Senator authorized and accepted its services and had ratified the

acts of his committee) (discussed in Kennedy, 110 Daily Wash. L.

Rep. at 1686)).

 

92Rich Printing Co. v. Estate of McKellar, 330 S.W.2d 361

(Tenn. Ct. App. 1959) (candidate's estate held liable).

 

93Hartke v. Moore-Langen Printing & Publishing Co., 459

N.E.2d 430 (Ind. Ct. App. 1984) (candidate held liable).

 

94Innovative Data Sys. v. Ellender, 316 So. 2d 12 (La. Ct.

App. 1975) (heir of candidate held potentially liable).

 

95Collins v. Williamson Printing Corp., 746 S.W.2d 489 (Tex.

App.))Dallas 1988) (candidate held liable).

 

96Parker v. Junior Press Printing Serv., Inc., 296 A.2d 377

(Md. 1972) (candidate held liable).

 

97Hunt v. Davis, 387 So. 2d 209 (Ala. Ct. Civ. App.)

(candidate held liable), writ denied, 387 S.W.2d 213 (Ala. 1980).

 

98FDIC v. Tyree, 698 S.W.2d 353 (Tenn. Ct. App. 1985) (Tenn.

1985) (reversing trial court grant of summary judgment in favor

of candidate); see also FDIC v. Morrison, Nos. 85-5272, 85-5273,

1987 WL 37065 (6th Cir. Apr. 14, 1989) (table opinion at 816 F.2d

679) (reversing district court grant of summary judgment in favor

of candidate).

 

99Rehm v. Sharp, 144 So. 78 (La. Ct. App. 1932) (candidate

held liable).

48

James Abdnor,91 Senator Kenneth D. McKellar,92 Senator Vance

Hartke,93 Senator Allen J. Ellender,94 James M. Collins (candidate

for the U.S. Senate),95 Peter Parker (candidate for the U.S.

Congress),96 Alabama gubernatorial candidate Guy Hunt,97 Tennessee

gubernatorial candidate Randy Tyree,98 Louisiana gubernatorial

candidate, William L. Clark,99 Alabama Attorney General candidate
 

100Perry v. Meredith, 381 So. 2d 649 (Ala. Ct. Civ. App.

1980) (candidate held liable).

 

101Progress Printing Corp. v. Jane Byrne Political Comm., 601

N.E.2d 1055 (Ill. App. Ct. 1992) (candidate held liable), cert.

denied, 610 N.E.2d 1275 (Ill. 1993).

 

102Victory Comm. v. Genesis Convention Ctr., 597 N.E.2d 361

(Ind. Ct. App. 1992) (candidate held liable).

49

T. Dudley Perry,100 Chicago Mayor Jane Byrne,101 and Gary (Indiana)

Mayor Richard Hatcher.102 

We must reiterate, however, that regardless of how harsh or

anomalous the results dictated by application of the law of

unincorporated nonprofit associations may appear to some, wary

candidates can easily avoid this trapSQat least in states with laws

like those of Texas and PennsylvaniaSQby either incorporating their

campaign committee or specifying in all committee contracts that

the purveyors of goods or services may look only to committee

assets for compensation. 

In sum, Thornburgh's actions, especially when viewed in light

of his education, his experience, and his familiarity with the

facts surrounding this matter, were no mere "string of

trivialities" as Thornburgh would have this court believe. Rather,

they confirm that he knew that the Committee would and did contract

for direct mail fundraising services and that he approved, at least

tacitly, the Committee's decision to enter into the September

Contract. This is sufficient proof that Thornburgh assented to the

agreement. Thus, we stand unconvinced that the district court

erred by holding Thornburgh liable for the September Contract; we

agree with the district court that "[g]iven his knowledge of the
 

103Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662, 675

(W.D. Tex. 1993).

 

104Id. at 675.

 

105In re Carolin Paxson Advertising, Inc., 938 F.2d 595, 598

n.2 (5th Cir. 1991) (citing American Int'l Trading Corp. v.

Petroleos Mexicanos, 835 F.2d 536, 539 (5th Cir. 1987)); see Ross

v. Texas One Partnership, 796 S.W.2d 206, 209-10 (Tex. Ct.

App.))Dallas 1990, writ denied) ("Although the question of agency

is generally one of fact, the question of whether a principalagent relationship exists under established facts is a question

of law for the court.").

50

direct fundraising campaign, his control over the substance of the

fundraising letters, and his authority to refuse to allow his

signature to appear on any letter or to refuse to allow any letter

to be mailed, Thornburgh did effectively say `go ahead' with the

direct mail campaign."103 

3. Thornburgh's Liability Resulting From Dickman's

Acts

The district court also found Thornburgh liable "as a result

of Dickman's authorization of, and assent to, the contract."104

Thornburgh does not contest the district court's finding that

Dickman authorized or assented to the contract; rather, Thornburgh

takes issue only with the court's conclusion that Dickman acted as

Thornburgh's general agent with authority to enter into a contract

with Rove & Company on Thornburgh's personal behalf. 

"Under Texas law, agency is a mixed question of law and fact.

To the extent that the facts are undisputed, the trial court's

ruling is freely reviewable on appeal. However, where . . . the

facts are disputed, the clearly erroneous standard applies."105 As

Thornburgh does not contest the factual findings upon which the
 

106Glauser v. State Farm Life Ins. Co., No. 01-93-00015-CV,

1994 WL 470355, at *14 (Tex. Ct. App.))Houston [1st Dist.] Aug.

31, 1994); see In re Incident Aboard D/B Ocean King, 813 F.2d

679, 688-89 (5th Cir. 1987), modified on other grounds by 877

F.2d 322 (5th Cir. 1989). See generally 1 STEVEN A. CHILDRESS &

MARTHA S. DAVIS, FEDERAL STANDARDS OF REVIEW § 2.18, at 2-125 to 2-127

(2d ed. 1992) (noting that, although many courts agree that mixed

questions in general are freely reviewed, more and more courts

now attempt to sort out whether the question primarily involves a

factual inquiry (reviewed under clearly erroneous standard) or a

legal inquiry (reviewed de novo).

 

107Lubbock Feedlots, Inc. v. Iowa Beef Processors, 630 F.2d

250, 269 (5th Cir. 1985) (citing Sorenson v. Shipe Bros. Co., 517

S.W.2d 861, 864 (Tex. Civ. App.))Amarillo 1974); Tarver, Steele &

Co. v. Pendleton Gin Co., 25 S.W.2d 156, 158 (Tex. Civ.

App.))Eastland 1930); and Valley View Cattle Co. v. Iowa Beef

Processors, Inc., 548 F.2d 1219, 1221 (5th Cir.), cert. denied,

434 U.S. 855 (1977)); Hall Dadeland Towers Assocs. v. Hardeman,

736 F. Supp. 1422, 1429 (N.D. Tex. 1990) (citing Carr v. Hunt,

651 S.W.2d 875 (Tex. Ct. App.))Dallas 1983, writ refused n.r.e));

3 TEX. JUR. Agency § 1.

 

1083 TEX. JUR. Agency § 13.

 

109Glauser, 1994 WL 470355, at *14; see Girard Trust Bank v.

Sweeney, 231 A.2d 407, 410 (Pa. 1967); Buscholz v. Kline, 184

S.W.2d 271 (Tex. 1944).

51

district court based its conclusion that Dickman acted as

Thornburgh's general agent, we review de novo that court's legal

conclusion.106

Agency is a legal relationship created by an express or

implied agreement or by operation of law whereby the agent is

authorized to act for the principal, subject to the principal's

control.107 As in the formation of any contract, the consent of

both parties is necessary to establish an agency relationship.108

Agency is never to be presumed; it must be shown affirmatively.109

The party who asserts the existence of agency relationship has the
 

110Jones v. Philpott, 702 F. Supp. 1210 (W.D. Pa. 1988)

(Pennsylvania law), aff'd, 891 F.2d 381 (3d Cir. 1989); Norton v.

Martin, 703 S.W.2d 267, 272 (Tex. Ct. App.))San Antonio 1985,

writ refused n.r.e) (Texas law).

 

111In re Carolin Paxson Advertising, Inc., 938 F.2d 595, 598

(5th Cir. 1991); see United States v. Contemporary Health

Management, 807 F. Supp. 47, 49 (E.D. Tex. 1992) ("Under Texas

agency law, the essential element is the `right of control' of

the purported agent by the purported principal.").

 

112In fact, Thornburgh argues that the court based its

finding solely on the fact that it did not believe Thornburgh's

and Dickman's testimony to the contrary, and "`[a] trial judge

may not use his disbelief of a witness as affirmative support for

the proposition that the opposite of the witness's testimony is

the truth.'" Seymour v. Oceanic Navigating Co., 453 F.2d 1185,

52

burden of proving it.110 To prove an agency relation under Texas

law, there must be evidence from which the court could conclude

that "[t]he alleged principal [had] the right to control both the

means and the details of the process by which the alleged agent

[was] to accomplish the task."111

Thornburgh argues that Rove failed to meet that burden.

Specifically, Thornburgh contends that Dickman was the Committee's

agent, not Thornburgh's; or, in the alternative, that if Dickman

was Thornburgh's agent, it was for the general purposes of running

the political side of the campaign))not for the purpose of imposing

personal liability on Thornburgh for the debts of the Committee.

Thornburgh reminds us that both he and Dickman testified that

Dickman was not expressly authorized to act as Thornburgh's agent

for any purpose))much less to enter into a contract for Thornburgh

personally))and that there is no direct evidence in the record to

refute this testimony and support the district court's findings to

the contrary.112
1191 (5th Cir. 1972) (alteration in original)).

 

113Grace Community Church v. Gonzalez, 853 S.W.2d 678, 680

(Tex. Ct. App.))Houston [14th Dist.] 1993); Kirby Forest Indus.,

Inc. v. Dobbs, 743 S.W.2d 348, 356 (Tex. Ct. App.))Beaumont 1987,

writ denied); see Wood v. Holiday Inns, Inc., 508 F.2d 167 (5th

Cir. 1975); Orozco v. Sander, 824 S.W.2d 555, 556 (Tex. 1992)

(per curiam); 3 TEX. JUR. Agency § 16.

53

a. Dickman As Thornburgh's Agent

Although both Thornburgh and Dickman testified that Thornburgh

had not constituted Dickman as Thornburgh's agent for any purpose,

agency can be implied from the conduct of the parties under the

circumstances.113 In the instant case, Dickman (the person

authorized to answer interrogatories on behalf of the Committee)

admitted in the Committee's answers to Rove & Company's

interrogatories that he was "the primary point of contact between

the Committee and Defendant Richard Thornburgh." Dickman also

acknowledged that he was known as "an intermediary" to Thornburgh

regarding, inter alia, the running and organizing of Thornburgh's

campaign. Thornburgh solicited Dickman's opinion on a "day-to-day

basis" about campaign activities, including broad campaign

strategies, where Thornburgh should speak, and what issues

Thornburgh should address. Thornburgh used Dickman as his gobetween to provide mailing lists, a signature exemplar, and edited

solicitation letters to the Committee to facilitate the Committee's

direct mail contract with Rove & Company. Thornburgh testified

that Dickman was a "loyal friend," who had served as a high-level

assistant to Thornburgh during several of Thornburgh's campaigns
 

114Contrary to Thornburgh's assertions, it was proper for the

district court to consider Dickman's relationship to Thornburgh

in determining whether Dickman acted as Thornburgh's agent. 

Although agency cannot be proven by evidence of the alleged

agent's general reputation as the agent of the alleged principal,

this does not mean that a court cannot look to the relationship

between the parties and their conduct concerning the transaction

in controversy as competent evidence of an agency relationship. 

See Union Producing Co. v. Allen, 297 S.W.2d 867 Tex. Civ. App.

1957); RESTATEMENT (SECOND) OF AGENCY § 34.

 

115See Karl Rove & Co. v. Thornburgh, 824 F. Supp. 662, 668,

675 & n.21 (W.D. Tex. 1993).

54

and while Thornburgh served in various government positions.114

Consistent with a principal's role, Thornburgh retained the

ultimate authority over Dickman and Dickman's activities within the

Committee. For example, even though Dickman took part in the

Committee's decision to hire Davis as the Committee's Campaign

Manager, Dickman acknowledged that, had Thornburgh disapproved of

this choice, another campaign manager would have been selected. In

addition, although Dickman authorized and assented to the

Committee's contract with Rove & Company, Thornburgh retained

control over the content of the fundraising letters and whether the

letters would be mailed at all.115 Finally, Thornburgh was the only

person authorized to grant the Committee (and thus its employees,

one of whom was Dickman) the authority to raise and spend funds on

Thornburgh's behalf. Thornburgh thus had the right to withhold his

authorization of the Committee, a decision that would have halted

all Committee activities))including Dickman's. Consequently, the

evidence supports the district court's finding that Dickman served

as Thornburgh's agent acting under Thornburgh's control.

Nevertheless, we still must determine the scope of Dickman's
 

116See RESTATEMENT (SECOND) OF AGENCY § 33 ("An agent is

authorized to do, and to do only, what it is reasonable for him

to infer that the principal desires him to do . . . .").

 

117See id. § 34.

 

118Karl Rove & Co., 824 F. Supp. at 671.

 

119See Hunt v. Davis. 387 So. 2d 209 (Ala. Ct. Civ. App.)

(candidate held liable based on contract entered into by employee

of campaign committee), writ denied, 387 So. 2d 213 (1980). We

55

authority.

b. The Scope of Dickman's Authority

An agent has only as much authority as the principal has

either expressly or impliedly conferred.116 The extent of an

agent's authority is determined in light of all surrounding

circumstances, including, inter alia, the parties' relations to one

another, the undertaking in which the parties are engaged, and the

general usages and practices of those engaged in such

undertakings.117

The district court found that Dickman acted as Thornburgh's

general agent, or, "[a]t the very least, Dickman had apparent

authority to act on Thornburgh's behalf with respect to the

campaign and, specifically, the agreement with Rove."118 Thornburgh

counters that even if Dickman did act as Thornburgh's agent, he was

authorized only to run the political side of the campaign, not to

enter into contracts making Thornburgh personally liable.

Although we recognize that there is some evidence and

authority to support the district court's conclusion that Dickman

was acting as Thornburgh's general agent, authorized to enter into

the September Contract for Thornburgh personally,119 we need not go
find distinguishable other cases holding candidates liable based

upon the actions of an alleged agent contracting with a vendor on

the personal behalf of the candidate. See, e.g., Hartke v.

Moore-Langen Printing & Publishing Co., 459 N.E.2d 430 (Ind. Ct.

App. 1984) (vendor testified that purported agent identified

himself as candidate's agent); Rehm v. Sharp, 144 So. 78 (La. Ct.

App. 1932) (unclear whether campaign committee existed,

candidate's designated campaign manager thus had actual or

implied authority to incur expenses on behalf of campaign); Rich

Printing Co. v. Estate of McKellar, 330 S.W.2d 361 (Tenn. Ct.

App. 1959) (primary campaign organization was not a voluntary

nonprofit association, thus campaign manger acted as candidate's

general agent during a primary campaign).

56

that far to hold Thornburgh liable here. The record makes clear

that Dickman acted as Thornburgh's agent to the Committee and was

authorized to represent Thornburgh in all Committee activities,

including whether to enter into the September Contract. This

finding alone is sufficient to hold Thornburgh personally liable,

given Thornburgh's acknowledgement that Dickman authorized and

assented to that Committee's contract with Rove & Company.

As discussed earlier, for Thornburgh to be liable for the

September Contract, Rove & Company had only to prove that

Thornburgh authorized, assented to, or ratified the Committee's

decision to enter into the agreement. Thornburgh could manifest

his authorization or assent personally or through an agent. In the

instant case, the record is clear that Dickman, as Thornburgh's

representative to the Committee, authorized or assented to the

September Contract.

Much of the same evidence that establishes that Dickman acted

as Thornburgh's agent also supports the district court's findings

that Dickman was Thornburgh's "primary point of contact" with the
 

120Karl Rove & Co., 824 F. Supp. at 668.

 

121Id. at 676.

 

122As we find Thornburgh liable on this basis, Thornburgh's

other assertions explaining why Dickman could not enter into a

contract for Thornburgh personally are irrelevant to the

resolution of this dispute. It is immaterial whether Thornburgh

lacked capacity to contract with Rove & Company, and thus could

57

Committee120 and that "Dickman's role in the Committee was obviously

to assure Thornburgh's interests would best be served and to be

Thornburgh's voice."121 There is no indication that these findings

by the district court were clearly erroneous. We also note that

Thornburgh testified that it is customary during a political

campaign for a candidate to rely on others, such as Dickman, to

manage the day-to-day operations of the campaign))which operations

would include such things as the purchase of services necessary to

support the candidacy. As it is customary to rely on others for

such services, and as the district court found that Dickman was the

primary person upon whom Thornburgh relied during his senatorial

campaign, we are led to but one conclusion: Dickman, as

Thornburgh's representative to the Committee, had either actual or

apparent authority to bestow Thornburgh's blessings on Committee

activities, which included the Committee's decision to contract

with Rove & Company. As Dickman had such authority, and as

Thornburgh concedes (and the record substantiates with

uncontroverted evidence) that Dickman authorized and assented to

the September Contract, Thornburgh can also be found liable for the

September Contract as a result of Dickman's authorization and

assent to the Committee's decision to enter into that agreement.122
not delegate such authority to Dickman, because Dickman

contracted with Rove & Company on the Committee's behalf))not for

Thornburgh personally. Likewise, it is unimportant to the issue

whether Dickman acted as Thornburgh's agent on the Committee

whether, as Thornburgh alleges, Rove was an experienced vendor

who believed that he could contract only with the Committee, and

thus looked to the Committee alone, not Thornburgh, for payment.

58

Consequently, we need not, and do not, reach the issue whether

Thornburgh also is personally liable because Dickman acted as

Thornburgh's general agent vis-á-vis Rove & Company, vested with

authority to enter into pacts such as the September Contract and

bind Thornburgh personally.

B. PERSONAL JURISDICTION OVER DIMUZIO

Guarding against the possibility that we might reverse the

district court's decision holding Thornburgh personally liable for

the September Contract, Rove & Company filed a cross appeal in the

alternative, contesting the portion of the district court judgment

holding that it lacked personal jurisdiction over Dimuzio. As we

conclude that Thornburgh is liable on the contract, we do not reach

this jurisdictional issue.

In addition to urging affirmance of the dismissal of the suit

against him, however, Dimuzio as cross-appellee seeks double costs

as a sanction against Rove & Company for filing a frivolous appeal

of the district court's ruling dismissing Dimuzio for lack of

personal jurisdiction. Although we agree with Dimuzio that Rove &

Company provided no authority and little argument in the section of

its brief designated as addressing its cross appeal, we believe

that, when read in its entirety, Rove & Company's brief adequately

explains the basis upon which it believed that Dimuzio could be
59

held amenable to the district court's jurisdiction and liable for

the Committee's debt. Thus, Rove & Company's cross appeal was not

so baseless as to constitute frivolousness for purposes of

sanctions. Accordingly, in the exercise of our discretion, we

elect to consider Rove & Company's cross appeal non-frivolous in

the context of the entire case and in light of the content of Rove

& Company's entire brief. We thus deny Dimuzio's request for

sanctions. III

CONCLUSION

The outcome of this case is dictated by the laws of Texas and

Pennsylvania. Under these laws, we are compelled to conclude that

Thornburgh personally is jointly and severally liable with the

Committee on the September Contract with Rove & Company. 

As we observed, relatively little time and money are required

to incorporate a campaign committee or to ensure by express

contractual provisions that all committee agreements exclude

personal liability of the candidate. Thus we are satisfied that

sufficient legal protection for candidates is already available in

the law, if candidates just avail themselves of these existing

safeguards. Otherwise, the law regarding unincorporated nonprofit

associations will supply the rules, and uncautious candidates will

be left to shoulder the financial consequences of their imprudence.

For the reasons detailed above, we AFFIRM the district court

judgment to the extent it holds Thornburgh liable for the debts of

the Committee, and DISMISS as moot the cross appeal of the court's

dismissal of Rove & Company's claim against Dimuzio. And we
60

DISMISS Dimuzio's request for sanctions.