Court Opinion

ID: 9883128
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:37:24.001431+00
Date Added: 2024-06-11T07:48:21.473602
License: Public Domain

Justice Powell,
concurring in part.
I agree with Justice Marshall that this case is moot. In view, however, of the decision of a majority of the Court to reach the merits, I join Parts I and V-B of the Court’s opinion.
I join Part V-B because its Commerce Clause reasoning leaves some room for state regulation of tender offers. This period in our history is marked by conglomerate corporate formations essentially unrestricted by the antitrust laws. Often the offeror possesses resources, in terms of professional personnel experienced in takeovers as well as of capital, that vastly exceed those of the takeover target. This disparity in resources may seriously disadvantage a relatively small or regional target corporation. Inevitably there are certain adverse consequences in terms of general public interest when corporate headquarters are moved away from a city and State.*
The Williams Act provisions, implementing a policy of neutrality, seem to assume corporate entities of substantially equal resources. I agree with Justice Stevens that the *647Williams Act’s neutrality policy does not necessarily imply a congressional intent to prohibit state legislation designed to assure — at least in some circumstances — greater protection to interests that include but often are broader than those of incumbent management.
Justice Stevens,
concurring in part and concurring in the judgment.
The question whether this case is moot depends on the effect of the preliminary injunction entered on February 2, 1979, restraining the Illinois Secretary of State from enforcing the Illinois Business Take-Over Act while the injunction remained in effect. If, as Justice Marshall contends in his dissenting opinion, the injunction granted the MITE Corp. a complete immunity from state sanctions for any acts performed while the injunction was outstanding, I would agree that the case is moot. On the other hand, if the injunction did no more than it purported to do, setting aside the injunction would remove its protection and MITE would be subject to sanctions in the state courts. Those courts might regard the fact that an injunction was outstanding at the time MITE violated the Illinois statute as a defense to any enforcement proceeding, but unless the federal injunction was tantamount to a grant of immunity, there is no federal rule of law that would require the state courts to absolve MITE from liability. I believe, therefore, that to resolve the mootness issue — which, of course, is jurisdictional — we must answer the question that Justice Marshall’s dissent raises.
Justice Marshall advances various reasons for adopting a rule that will give federal judges the power to grant complete immunity to persons who desire to test the constitutionality of a state statute. His proposed rule would treat any federal judge’s preliminary injunction restraining enforcement of a state statute on federal grounds as a grant of immunity with respect to any conduct undertaken while the injunc*648tion was outstanding. Under the rule he proposes, “if the statute is later determined to be valid, the State will never be able to prosecute the individual that obtained the preliminary injunction for action taken while the injunction was in effect.” Post, at 657, n. 1. For me, the question is not whether such a rule would be wise; the question is whether federal judges possess the power to grant such immunity. In my opinion they do not.
I
The essential facts of this case are few and bear repeating. On February 2, 1979, MITE Corp. and MITE Holdings, Inc., obtained a preliminary injunction restraining the Illinois Secretary of State from invoking the provisions of the Illinois Business Take-Over Act to block MITE’s intended takeover of Chicago Rivet & Machine Co. Three days later, without complying with the provisions of the Illinois statute, MITE published its offer in the Wall Street Journal. On February 9, 1979, the District Court entered a judgment declaring the Illinois statute unconstitutional; the court permanently enjoined the Secretary from enforcing the Illinois statute against MITE.
The State contends that the attempted takeover was subject to the provisions of the Illinois statute and that MITE violated the Act by failing to register with the Illinois Secretary of State. The State further argues that the Take-Over Act is consistent with federal law. For purposes of deciding the mootness issue, we must assume that these contentions are correct; a holding that this case is moot would mean that MITE is completely protected from any adverse action whether or not the statute is unconstitutional. Such a conclusion would be possible only if the District Court’s preliminary injunction granted MITE absolute and permanent immunity from any prosecution — civil or criminal — brought to enforce the Illinois statute.
Neither the terms of the preliminary injunction nor prior equity practice provides any support for an interpretation of *649the District Court’s order as a grant of total immunity from future prosecution. More fundamentally, federal judges have no power to grant such blanket dispensation from the requirements of valid legislative enactments.
A
An injunction restrains conduct. Its effect is normally limited to the parties named in the instrument. Since a preliminary injunction may be granted on a mere probability of success on the merits, generally the moving party must demonstrate confidence in his legal position by posting bond in an amount sufficient to protect his adversary from loss in the event that future proceedings prove that the injunction issued wrongfully.1 The bond, in effect, is the moving party’s warranty that the law will uphold the issuance of the injunction.
These features of injunctive relief are inconsistent with a blanket grant of immumty, as this case demonstrates. The preliminary injunction did not purport to provide permanent immunity for violations of the statute that occurred during its effective period. It merely provided that the Secretary of State was enjoined from “issuing any cease and desist order or notice of hearing or from otherwise invoking, applying, or enforcing the Illinois Business Take-Over Act” against MITE. Record 16. It did not enjoin other parties who are authorized by the Act to enforce its provisions. Ill. Rev. *650Stat., ch. 121/2, ¶¶ 137.62, 137.64 (1979). Moreover, the preliminary injunction was entered without any declaration that the Illinois statute was unconstitutional. There simply is no basis on which to conclude that the preliminary injunction issued by the District Court should be construed as having granted MITE permanent immunity from future proceedings brought under the Illinois statute.
In Steffel v. Thompson, 415 U. S. 452, the Court unanimously held that an individual who wished to engage in “constitutionally protected activity” but was threatened with prosecution under a state criminal statute could obtain a declaratory judgment in federal court declaring the statute invalid. The Court did not suggest that, armed with such a judgment from a federal district court, the individual could violate the statute with impunity; indeed, it stated just the opposite:
“‘[A] federal declaration of unconstitutionality reflects the opinion of the federal court that the statute cannot be fully enforced. If a declaration of total unconstitutionality is affirmed by this Court, it follows that this Court stands ready to reverse any conviction under the statute.’” Id., at 469-470 (quoting Perez v. Ledesma, 401 U. S. 82, 124 (separate opinion of Brennan, J.)).2
Justice White attached possibly the greatest significance to a federal declaratory judgment, writing separately in Steffel that “I would anticipate that a final declaratory judgment entered by a federal court holding particular conduct of the federal plaintiff to be immune on federal constitutional grounds from prosecution under state law should be accorded res judicata effect in any later prosecution of that very conduct.” *651415 U. S., at 477 (concurring opinion). A declaratory judgment reversed on appeal, however, certainly would not have such res judicata effect.
An individual who is imminently threatened with prosecution for conduct that he believes is constitutionally protected should not be forced to act at his peril. One purpose of the federal declaratory judgment statute is to permit such an individual to test the legality of a state statute before engaging in conduct that is prohibited by its terms. See S. Rep. No. 1005, 73d Cong., 2d Sess., 2-3 (1934). Recognition of this fact, however, does not determine the point at which an individual may act with absolute assurance that he may not be punished for his contemplated activity. The fact that a federal judge has entered a declaration that the law is invalid does not provide that assurance; every litigant is painfully aware of the possibility that a favorable judgment of a trial court may be reversed on appeal. To repeat the words of this Court in Steffel, the most that can be said is: “ Tf a declaration of total unconstitutionality is affirmed by this Court, it follows that this Court stands ready to reverse any conviction under the statute.’ ” 415 U. S., at 470 (quoting Perez v. Ledesma, supra, at 124 (separate opinion of Brennan, J.)).3
Since a final judgment declaring a state statute unconstitutional would not grant immunity for actions taken in reliance on the court’s decision, certainly a preliminary injunction— which on its face does nothing more than temporarily restrain conduct — should not accomplish that result. Neither the *652preliminary injunction nor the subsequent judgment declaring the statute unconstitutional can fairly be construed as a grant of absolute immunity from enforcement of the Illinois statute.4
B
My conclusions concerning the proper nature of injunctive and declaratory relief are not based upon arcane interpreta*653tions of common law. Federal courts are courts of limited jurisdiction.5 Before a federal court exercises any governmental power, it has a duty to determine its own jurisdiction to act. There simply is no constitutional or statutory authority that permits a federal judge to grant dispensation from a valid state law.6
As I have written before, the federal judiciary can continue to perform its vital function in our governmental structure only if it recognizes the limitations on its own legitimate authority. United States v. New York Telephone Co., 434 U. S. 159, 178 (Stevens, J., dissenting in part). A belief that a particular result appears reasonable or wise is an insufficient predicate for the exercise of federal judicial power. *654The District Court in this case entered both an injunction restraining certain conduct by the Illinois Secretary of State and a judgment declaring a state statute unconstitutional. It did not — because it could not — grant immunity from the requirements of a valid state law.7 As a result, this Court has jurisdiction to consider whether the judgment and relief entered by the District Court were proper.8
1 — 1 H — 1
On the merits, I agree with the Court that the Illinois Take-Over Act is invalid because it burdens interstate com*655merce. I therefore join Part V of its opinion. I am not persuaded, however, that Congress’ decision to follow a policy of neutrality in its own legislation is tantamount to a federal prohibition against state legislation designed to provide special protection for incumbent management. Accordingly, although I agree with the Court’s assessment of the impact of the Illinois statute, I do not join its pre-emption.holding.
Justice O’Connor,
concurring in part.
I agree with the Court that the case is not moot, and that portions of the Illinois Business Take-Over Act, Ill. Rev. Stat., ch. 12114, ¶ 137.51 et seq. (1979), are invalid under the Commerce Clause. Because it is not necessary to reach the pre-emption issue, I join only Parts I, II, and V of the Court’s opinion, and would affirm the judgment of the Court of Appeals on that basis.

The corporate headquarters of the great national and multinational corporations tend to be located in the large cities of a few States. When corporate headquarters are transferred out of a city and State into one of these metropolitan centers, the State and locality from which the. transfer is made inevitably suffer significantly. Management personnel — many of whom have provided community leadership — may move to the new corporate headquarters. Contributions to cultural, charitable, and educational life — both in terms of leadership and financial support — also tend to diminish when there is a move of corporate headquarters.

 As provided by Federal Rule of Civil Procedure 65(c):
“No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. No such security shall be required of the United States or of an officer or agency thereof.”
In Illinois damages apparently may be recovered for injuries caused by a preliminary injunction issued wrongfully by a st;> o court even in the absence of an indemnity bond or abuse of process. See Ill. Rov. Stat., ch. 69, ¶ 12 (1979); Note, 73 Harv. L. Rev. 333, 34" u°59).

 See also 415 U. S., at 480 (Rehnquist, J., concurring) (“There is nothing in the [Declaratory Judgment] Act’s history to suggest that Congress intended to provide persons wishing to violate state laws with a federal shield behind which they could carry on their contemplated conduct”); id., at 482 (“A declaratory judgment is simply a statement of rights, not a binding order supplemented by continuing sanctions”).

 The fact that an unreviewed judgment does not provide absolute protection does not render the declaratory judgment of a district court or a court of appeals meaningless. As stated in Steffel:
“ ‘Even where a declaration of unconstitutionality is not reviewed by this Court, the declaration may still be able to cut down the deterrent effect of an unconstitutional state statute. The persuasive force of the court’s opinion and judgment may lead state prosecutors, courts, and legislators to reconsider their respective responsibilities toward the statute. Enforcement policies or judicial construction may be changed, or the legislature may repeal the statute and start anew.’ ” 415 U. S., at 470 (quoting Perez v. Ledesma, 401 U. S., at 125 (separate opinion of Brennan, J.)).

 In Liner v. Jafco, Inc., 375 U. S. 301, the respondent obtained an injunction from a state court that restrained picketing at a construction site. Petitioners moved to dissolve the injunction on the ground that the state court was without jurisdiction to adjudicate the controversy because the subject matter of the picketing was exclusively within the cognizance of the National Labor Relations Board. Petitioners’ motion was denied by the state court and that decision was affirmed on appeal. This Court granted a petition for certiorari.
While the case was pending in the state appellate court, construction at the site was completed. This Court nevertheless held that the issue of whether the injunction had issued properly was not moot because the respondent remained liable on an indemnity bond if the injunction had issued wrongfully. The Court stated:
“The petitioners plainly have ‘a substantial stake in the judgment . . . ,’ Fiswick v. United States, 329 U. S. 211, 222, which exists apart from and is unaffected by the completion of construction. Their interest derives from the undertaking of respondent Jafco, Inc., in the injunction bond to indemnify them in damages if the injunction was ‘wrongfully’ sued out. Whether the injunction was wrongfully sued out turns solely upon the answer to the federal question which the petitioners have pressed from the beginning. If the answer of the Tennessee Court of Appeals to that question may not be challenged here, the petitioners have no recourse against Jafco on the bond.” Id., at 305-306.
In this case it does not appear that MITE is liable on an injunction bond. The posting of an indemnity bond, however, merely creates a right of action — that may or may not otherwise exist — for damages caused during the period that a wrongfully issued injunction was in effect. In this case, such rights of action exist under an independent state law that we must presume to be valid. As in Liner, these rights of action may be pursued “if the injunction was ‘wrongfully’ sued out”; and “[wjhether the injunction was wrongfully sued out turns solely upon the answer to the federal question which the petitioners have pressed from the beginning.”

 As stated by Chief Justice Marshall in Ex parte Bollman, 4 Cranch 75, 93:
“As preliminary to any investigation of the merits of this motion, this court deems it proper to declare that it disdains all jurisdiction not given by the constitution, or by the laws of the United States.
“Courts which originate in the common law possess a jurisdiction which must be regulated by the common law, until some statute shall change their established principles; but courts which are created by written law, and whose jurisdiction is defined by written law, cannot transcend that jurisdiction. It is unnecessary to state the reasoning on which this opinion is founded, because it has been repeatedly given by this court; and with the decisions heretofore rendered on this point, no member of the bench has, even for an instant, been dissatisfied.”

 I do not suggest that, if the state law is valid, a federal court lacks jurisdiction to enter an injunction restraining state officials from enforcing the statute. Such an injunction may be appropriate — and would be binding on the parties — to permit the federal court to preserve its jurisdiction pending a final decision on the constitutionality of the statute. United States v. Mine Workers, 330 U. S. 258, 289-290. “Although only temporary, the injunction does prohibit state and local enforcement activities against the federal plaintiff pending final resolution of his ease in the federal court.” Doran v. Salem Inn, Inc., 422 U. S. 922, 931. Such an injunction does not continue to be binding on the parties, however, if it is vacated on appeal; “an order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings.” United States v. Mine Workers, supra, at 293 (emphasis added).

 A conflict between a federal rule of law and a state statute may nullify the state law. Although such invalidity may not be recognized or accepted until it is identified in litigation, in my opinion the conflict with a paramount rule of federal law nullifies a state law whether or not litigation is ever commenced. In other words, it is federal rules of law — and not the actions of federal judges — that may render a state law invalid.

 Justice Rehnquist concludes that this case is moot because the injunction restrains an enforcement proceeding that has not yet begun. If his view were accepted, an injunction against a threatened criminal proceeding, see Dombrowski v. Pfister, 380 U. S. 479, would never be appropriate, for the controversy between the parties would not yet be “ripe.” MITE sought an injunction not only to prevent the Illinois Secretary of State from interfering with its attempted takeover of Chicago Rivet, but also to bar the Secretary from proceeding against MITE for actions taken in violation of the statute. What is critical to the mootness question in this case is not that MITE abandoned the takeover before it was completed, but that MITE engaged in conduct that violated the terms of the Illinois statute. The extent of MITE’s violation of state law cannot be determinative of its interest in avoiding an enforcement proceeding based on what MITE believed was constitutionally protected activity.
Oil Workers v. Missouri, 361 U. S. 363, relied on by Justice Rehnquist, does not compel a contrary result. In that case, the party subject to the injunction terminated the activity that had been enjoined. As a result, this Court refused to consider whether the injunction had issued properly, even though a resolution of that question would also have resolved other matters — based on similar questions of law — pending in another proceeding between the same parties. In this case, the party subject to the injunction — the Illinois Secretary of State — has not abandoned his desire to do what the injunction currently restrains him from doing.