Nader v. Altermatt

• Citation: 166 Conn. 43,347 A.2d 89
• Court: Supreme Court of Connecticut
• Decision Date: 26 February 1974
• Parties: Ralph NADER et al. v. Paul B. ALTERMATT et al.

Page 89

347 A.2d 89

166 Conn. 43

Ralph NADER et al. v. Paul B. ALTERMATT et al.

Supreme Court of Connecticut.

Feb. 26, 1974.

Dwight O. Schweitzer, Hartford, with whom, on the brief, was Bruce C. Mayor, Hartford, for appellants (plaintiffs).

Joseph P. Cooney, Hartford, and John H. Schafer, III, Washington, D.C., of the District of Columbia bar, for appellees (defedants International Telephone and Telegraph Co. and the Hartford Fire Ins. Co.).

Frank Rogers, Asst. Atty. Gen., for appellee (named defendant).

Before HOUSE, C.J., and SHAPIRO, LOISELLE, MacDONALD and BOGDANSKI, JJ.

JOUSE, Chief Justice.

The plaintiffs have appealed from a judgment of the Superior Court dismissing their appeal from a finding and final order of the defendant ¹ insurance commissioner of the state of Connecticut approving an application by the defendant, International Telephone and Telegraph Corporation, hereinafter referred to as ITT, to make an exchange offer for the stock of the defendant, Hartford Fire Insurance Company, hereinafter referred to as Hartford Fire, pursuant to the then recently enacted provisions of Public Act No. 444 of the 1969 session, now codified as §§ 38-39a through 38-39l of the General Statutes.

The court made a limited finding confined to the issue of aggrievement. From this the following facts appear: The plaintiff, Ralph Nader, is an author, lecturer and advocate of consumer interests, who resides in the District of Columbia, although he is a member of the bar and a domiciliary of Connecticut. The plaintiff, Reuben Robertson, who is an attorney and associate of the plaintiff Ralph Nader and who likewise resides in the District of Columbia, has been, since prior to December 22, 1969 (the exchange offer application date), the holder of a basic homeowner's insurance policy issued by the defendant Hartford Fire in the amount of $35,000 for which the premium is approximately $200 per three-year term. The plaintiff, Peter Cooper, is a resident of Connecticut and has been a shareholder of ITT since prior to December 22, 1969. The plainitff, Margaret Curtin, is a resident of Connecticut who, from prior to December 22, 1969, had been a shareholder of the defendant Hartford Fire. On October 11, 1973, the defendant ITT, a Delaware corporation with its principal headquarters in New York and qualified to do business in Connecticut, and the defendant Hartford Fire, a Connecticut corporation specially chartered to engage in the business of insurance, moved to dismiss the appeal of the plaintiff, Margaret Curtin, averring that her justiciable interest in the litigation terminated on April 23, 1973, when she exchanged all her shares of Hartford Fire for shares of ITT stock, pursuant to the exchange offer which is the subject matter of this dispute. This court denied that motion without prejudice to argument at the time of the appeal of the issue raised by the motion. Nader v. Altermatt, 165 Conn. 818, 310 A.2d 74.

On July 23, 1969, the defendants ITT and Hartford Fire sought the approval of the insurance commissioner for a proposed plan and agreement of merger. After a public hearing, however, approval of the plan was denied by the commissioner's finding and order dated December 13, 1969, wherein the commissioner expressed dissatisfaction with various aspects of the proposal and stated that the proper method for effectuating an affiliation between the companies was by exchange offer pursuant to Public Act No. 444, which had become law upon its passage on June 11, 1969.

On December 22, 1969, ITT submitted an application for a proposed tender offer whereby shares of ITT series N convertible preferred stock would be offered on a stated exchange ratio for common stock of Hartford Fire. Although the financial terms of the plan of the merger and exchange offer were substantially the same, the exchange offer proposal gave each Hartford Fire shareholder the unrestricted option to accept or reject the ITT stock, whereas, under the earlier proposed plan of merger, dissenting shareholders would have been left to their statutory rights of appraisal. Furthermore, certain executive stock options, which the commissioner had previously found objectionable, had been voluntarily relinquished by the corporate officers involved. Approximately 99 percent of the common stock of Hartford Fire was tendered to ITT under this exchange offer.

ITT's application for the acquisition of a domestic insurance company was the first to be filed under the new law which required, ² an information statement to be filed with the commissioner, sent to the target insurance company and disseminated by the insurance company to its stockholders within thirty days of its receipt by the target company and upon approval by the commissioner.

The commissioner authorized the dissemination of the tender offer statement, which included ten categories of information. The statement and a notice of public hearing were mailed on Janury 18, 1970, to each Hartford Fire shareholder of record as of December 31, 1969. Notices of the public hearing were published with the requisite frequency in the Wall Street Journal, the New York Times, the Hartford Courant and the Hartford Times.

At the public hearings held by the commissioner between March 10 and March 12, 1970, ITT presented twenty-six exhibits and the testimony of fifteen witnesses including executives of ITT and Hartford Fire, executives of ITT subsidiaries and independent financial and insurance analysts. Although interested persons and members of the public were afforded the opportunity to make statements, to present evidence including testimony and to examine and cross-examine witnesses, none of the plaintiffs appeared or otherwise participated in the public hearings.

The plaintiffs' brief discloses that after the conclusion of the public hearings, Nader met privately with the insurance commissioner and subsequently submitted statements, information and papers in the nature of a brief in opposition to the ITT application.

The commissioner issued a finding and final order on May 23, 1970, which found that ITT's application satisfied each of the five substantive criteria required under the statute. ³ Nader and Robertson filed a petition for a rehearing which was denied by the commissioner on May 28, 1970.

The plaintiffs sought a review de novo in the Superior Court pursuant to § 38-39k of the General Statutes ⁴ (§ 11(a) of 1969 Public Act No. 444), which permits an appeal and judicial review to '(a)ny person aggrieved by any regulation, order or other action of the commissioner' and further provides: 'The court shall conduct its review without a jury and by trial de novo, except if all parties so stipulate, the review shall be confined to the record.' The parties refused to stipulate and the court proceeded with a hearing at the conclusion of which it rendered judgment dismissing the appeal. On the appeal to this court from that judgment, the trial court filed a limited finding confined to the issue of aggrievement.

The decisive issue for our consideration on this appeal is whether the trial court was in error in concluding that the plaintiffs had failed to prove that they were aggrieved persons within the intendment of the provisions of § 38-39k(a) of the General Statutes and, accordingly, lacked standing to appeal from the May 23, 1970, finding and final order of the insurance commissioner. We conclude that the court was not in error.

The fundamental test by which the status of aggrievement for purposes of qualifying to take an appeal from an administrative order or regulation is determined encompasses a well settled twofold determination. First, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in the subject matter of the decision, as distinguished from a general interest, such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the decision. New Haven v. Public Utilities Commission, 165 Conn. 687, p. 700, 345 A.2d 563; Sheridan v. Planning Board, 159 Conn. 1, 13, 266 A.2d 396; Johnson v. Zoning Board of Appeals, 156 Conn. 622, 623, 238 A.2d 413; Hughes v. Town Planning & Zoning Commission, 156 Conn. 505, 507-508, 242 A.2d 705; Gregorio v. Zoning Board of Appeals, 155 Conn. 422, 425-426, 232 A.2d 330; I. R. Stich Associates, Inc. v. Town Council, 155 Conn. 1, 3, 229 A.2d 545; Kreipcio v. Zoning Board of Appeals, 152 Conn. 657, 660, 211 A.2d 687; Tucker v. Zoning Board of Appeals, 151 Conn. 510, 514, 199 A.2d 685; Tyler v. Board of Zoning Appeals, 145 Conn. 655, 662, 145 A.2d 832; see 2 Cooper, State Administrative Law, pp. 538-41.

The plaintiffs contend that their standing to appeal 'must be judged by the relevant statutory scheme' and claim in their brief that they 'fall well within the class of persons intended to be protected by the statutory scheme.' In support of their assertion, they rely upon numerous federal decisions that we find inapposite to the disposition of this issue under § 38-39k(a) of the General Statutes, which expressly limited the right to obtain judicial review by appeal to 'any person aggrieved.' Even under federal standards upon which the plaintiffs rely, to obtain judicial review of the action of a federal agency a plaintiff must demonstrate an 'injury in fact,' economic or otherwise, to acquire standing to sue. ⁵ Assn. of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 152-154, 90 S.Ct. 827, 25 L.Ed.2d 184; Sierra Club v. Morton, 405 U.S. 727, 738, 92 S.Ct. 1361, 31 L.Ed.2d 636; note, 11 A.L.R.Fed. 556, 560-567, §§ 2, 3. '(A) person who is not injured in fact by governmental action he seeks to challenge should be denied standing, even if he is trying to represent what he believes to be in the public interest.' Davis,...