Opinion ID: 682427
Heading Depth: 3
Heading Rank: 2

Heading: Thornburgh Assented to the September Contract

Text: 73 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. 74 As a general proposition in the context of the law of unincorporated nonprofit associations--and thus unincorporated political committees--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 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. 75 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 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, 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.) 76 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 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. 77 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. 78 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 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 association--even prospectively--is certainly probative of whether that member agreed with the association's decision to enter into that same agreement. 79 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 80 Thornburgh also posits that he could not assent to a contract 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 81 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 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. 82 Thornburgh contends finally that the acts relied on by the district court as evidencing assent constitute nothing more than 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. 83 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 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 T. Dudley Perry, 100 Chicago Mayor Jane Byrne, 101 and Gary (Indiana) Mayor Richard Hatcher. 102 84 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 trap--at least in states with laws like those of Texas and Pennsylvania--by 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. 85 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 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 86