Court Opinion

ID: 9448906
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:48:32.173433+00
Date Added: 2024-06-11T17:31:35.928547
License: Public Domain

BAZELON, Chief Judge
(dissenting).
Kukatush is an alien corporation organized under the laws of Canada. This court holds that, as such, Kukatush lacks standing to bring this suit. I disagree. Our courts are open to corporations domiciled in friendly countries.1 Disconto Gesellschaft v. Umbreit, 208 U.S. 570, 578, 28 S.Ct. 337, 52 L.Ed. 625 (1908); 23 Am.Jur. Foreign Corporations §§ 3, 7, 474 (1939); 18 Fletcher, Cyclopedia of Corporations § 8606 (1955). See Russian Volunteer Fleet v. United States, 282 U.S. 481, 51 S.Ct. 229, 75 L.Ed. 473 (1931); Cia Mexicana De Gas S. A. v. Federal Power Comm., 167 F.2d 804 (5th Cir.1958). Cf. Estrada v. Ahrens, 296 F.2d 690 (5th Cir.1961).2
*652Kukatush seeks review under § 10(a) of the Administrative Procedure Act.3 But publication of the Canadian Restricted List is not “agency action” reviewable under that provision. See Hearst Radio, Inc. v. Federal Communications Comm., 83 U.S.App.D.C. 63, 167 F.2d 225 (1948).
Kukatush also relies on the general equity powers of the District Court. D. C.Code § 11-306. The complaint, which names the Commission and its members, alleges that they exceeded their statutory authority and deprived the company of due process by placing its name on the Canadian Restricted List without first holding a hearing. It is further alleged that the listing damaged Kukatush’s reputation in the United States and elsewhere, seriously affected its contractual relations with American and foreign companies, and prejudiced its ability to obtain bank financing in the United States and abroad, and to employ competent directors and employees. Finally, the complaint states in substance that Kukatush’s stock has never been distributed in the United States in violation of the Securities Exchange Act of 1934. I think these allegations are sufficient to invoke consideration under the general equity powers of the District Court.4
Turning to the merits, I think that distribution of the Canadian Restricted List is authorized by § 21(a) of the Securities Act5 which permits the Commission “in its discretion, to publish information” concerning violations of the Act.6 In my view, no prior hearing is required if the Commission has reasonable cause to believe that the Securities Act is being violated.7 Prompt warning would then be necessary to protect investors.8 And prior hearing may be impractical where the violators are across the border and beyond the reach of the Commission’s subpoena power.
But after the List is issued, I think a company named thereon is entitled to a *653hearing.9 The Commission has virtually conceded this by “establishing a definite procedure to secure prompt determination of [the] question [whether the company was improperly listed].” 10

. The majority relies upon Johnson v. Eisentrager, 339 U.S. 763, 70 S.Ct. 936, 94 L.Ed. 1255 (1950), which held that the writ of habeas corpus does not run outside the United States for the benefit of enemy aliens imprisoned in time of war. Kukatush is domiciled in a friendly country and seeks relief within the United States.

. For purposes of standing, I see no difference between the so-called “res” involved in the cited cases — i. e., contracts and assets — and the “res” involved in the instant case — i. e., the “Canadian Restricted List.” Nor do the cited cases appear to support such a distinction.

. “Any person * * * adversely affected or aggrieved by [any agency action] * * * within the meaning of any relevant statute, shall be entitled to judicial review thereof.” Administrative Procedure Act § 10(a), 60 Stat. 243 (1946), 5 U.S.C.A. § 1009(a).

. See Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958); Harmon v. Brucker, 355 U.S. 579, 78 S.Ct. 433, 2 L.Ed.2d 503 (1958); American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 23 S.Ct. 33, 47 L.Ed. 90 (1902); Utah Fuel Co. v. National Bituminous Coal Comm., 306 U.S. 56, 59 S.Ct. 409, 83 L.Ed. 483 (1938); Ex parte Young, 209 U.S. 123, 155-156, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Copper Plumber & Heating Co. v. Campbell, 110 U.S.App.D.C. 177, 290 F.2d 368 (1961); Davis, Administrative Law § 23.-04 (1958). Cf. United States v. Interstate Commerce Comm., 337 U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451 (1949). See also authorities cited note 9 infra.

. 48 Stat. 899 (1934), 15 U.S.C.A. § 78u.

. See Schmidt v. United States, 198 F.2d 32 (7th Cir. 1952), cert. denied, 344 U.S. 896, 73 S.Ct. 276, 97 L.Ed. 693 (1952).

. See R. A. Holman & Co. v. Securities & Exchange Comm., 112 U.S.App.D.C. 43, 299 F.2d 127, cert. denied, 370 U.S. 911, 82 S.Ct. 1257, 8 L.Ed.2d 404 (1962). Cf. Hannah v. Larche, 363 U.S. 420, 446-448, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960).
Exhibits attached to the Commission’s motion to dismiss may have been adequate for this purpose. They reveal that investigations by the Commission in cooperation with the Quebec Securities Commission turned up evidence that Ku-katush shares were unlawfully distributed in the United States in 1959, 1960 and 1961. In addition, those exhibits show that a registration statement covering an issue of Kukatush stock was filed in 1961. It was withdrawn when the company learned the Commission planned to institute stop order proceedings because the statement was believed to be “false and fraudulent.”

. See generally 17 SEC Ann.Rep. 159 (1957); Pollock & Timbers, Extradition from Canada to the United States for Securities Fraud: Frustration of the National Policies of Both Countries, 24 Fordham L.Rev. 301 (1955).

. See Holman v. Securities & Exchange Comm., supra note 7. Cf. Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817 (1951); Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377 (1959); Hannah v. Larche, 363 U.S. 420, 488, 492, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1980) (Frankfurter, J., concurring) (dictum). But cf. Cafeteria and Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961).

. Brief for the Commission, p. 7. The procedure was announced after this suit began in SEC Securities Act Release No. 4407 (1961). Appellant was not required to follow the procedure before bringing this action, however. See Administrative Procedure Act § 3(a), 60 Stat. 238 (1946), 5 U.S.C.A. § 1002(a).