Ott v. Boston Edison Co.

Citation413 Mass. 680,602 N.E.2d 566
CourtUnited States State Supreme Judicial Court of Massachusetts
Decision Date10 November 1992
PartiesMerle D. OTT & another 1 v. BOSTON EDISON COMPANY.

David S. Godkin, Gordon H. Hayes, Boston, with him, for plaintiffs.

John D. Donovan, Jr., Matthew M. Burke, Boston, with him, for defendant.

Stephen S. Ostrach & Emily R. Livingston, Boston, for amici curiae New England Corporate Counsel Ass'n & another, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, O'CONNOR and GREANEY, JJ.

WILKINS, Justice.

The substantive issue in this appeal is no longer in controversy and is moot because the plaintiff appellants have attained by another process the objective that they sought by the commencement of this action. The circumstances do not justify or require an expression of our views on the substantive issue. The issue is not likely to recur between the parties or people similarly situated and, if it did, a timely and final judicial resolution of it would be possible.

Merle D. Ott has been a stockholder of the defendant Boston Edison Company (Edison) since 1988. Mary C. Ott, having a proxy from her husband, attended Edison's May, 1990, annual stockholders' meeting. At that meeting, she sought to present a resolution for stockholder action that would direct Edison to cease the generation of commercial electric power at Edison's Pilgrim station if certain circumstances occurred. 2 The presiding officer ruled that the resolution was out of order.

In November, 1990, more than five months before Edison's 1991 annual stockholders' meeting, the Otts submitted a proposal for inclusion in Edison's proxy statement for that meeting. That proposal included a resolution that, if adopted, would recommend that Edison immediately shut down its Pilgrim nuclear power station because "the potential for physical harm and the risk of plant-related liabilities outweigh the inherent profit potential from continuing Pilgrim operations." After intermediate correspondence between the Otts and Edison, Edison advised the Otts at the end of December, 1990, that Edison had decided to omit the Otts' proposal from its 1991 proxy statement because the Otts failed to meet the eligibility requirements of rule 14a-8(a)(1) of the Securities and Exchange Commission (SEC). See 17 C.F.R. § 240.14a-8(a)(1) (1992). That regulation grants a right to a stockholder of a company like Edison to submit a proposal for stockholder action if the stockholder owns at least 1% or $1,000 in market value of the securities entitled to vote at a stockholders' meeting. It is undisputed that the Otts did not meet the eligibility standard of the SEC rule.

Prior to the May 2, 1991, annual meeting, the Otts commenced this action seeking preliminary injunctive relief that would direct Edison to include the Otts' proposal in Edison's 1991 annual meeting proxy statement and would enjoin Edison from interfering with the presentation of the Otts' resolution at that meeting. They also sought a declaration that Edison had interfered with their right under Massachusetts law to present their proposal to Edison's stockholders. A Superior Court judge denied the Otts' request for preliminary relief. In the summer of 1991, another judge awarded Edison summary judgment, ruling that Edison had not violated the law of the Commonwealth in omitting the Otts' proposal from the notice and proxy statement for the 1991 annual stockholders' meeting and in ruling that their 1990 proposal was out of order. We granted the Otts' application for direct appellate review.

In November, 1991, approximately two months after judgment had been entered in the Superior Court, the Otts, joined by another Edison stockholder so as to meet the eligibility requirement of the SEC rule, presented to Edison a proposed resolution and supporting statement for inclusion in the proxy statement for Edison's 1992 annual stockholders' meeting. The proposed resolution was the same as that which the Otts had sought to present to the 1991 annual meeting. Edison submitted the proposal to its 1992 annual meeting on April 28, 1992, where it was defeated.

There is no current actual controversy warranting declaratory relief as to the Otts' rights concerning earlier stockholders' meetings. We could not give them retroactive relief, even if Edison had acted improperly in any respect. The Otts have attained their objective of a stockholders' vote on their proposed resolution. They need no prospective relief. The Otts, nevertheless, argue against a finding of mootness, claiming that they would be entitled to attorneys' fees, if they were successful on the merits of their claim (a point we assume in their favor without deciding it). A potential claim for attorneys' fees standing alone does not justify deciding a moot case. See Brookline Citizens to Protect the Parks Taxpayer Group v. Selectmen of Brookline, 27 Mass.App.Ct. 1191, 1192, 543 N.E.2d 430 (1989).

We have on occasion exercised our discretion to answer questions in moot cases where certain conditions existed: (1) the issue was fully argued on both sides; (2) the question was certain, or at least very likely, to arise again in similar factual circumstances; (3) where appellate review could not be obtained before the recurring question would again be moot; and (4) most importantly, the issue was of public importance. See Lockhart v. Attorney Gen., 390 Mass. 780, 783, 459 N.E.2d 813 (1984), and cases cited. See also Matter of Sturtz, 410 Mass. 58, 59-60, 570 N.E.2d 1024 (1991).

The considerations bearing on whether this court should exercise its discretion to answer the question in this moot case lead us to decline to do so. The requirement that the issue be fully briefed does not so much instruct us to decide a moot issue as it instructs us not to pass on a moot issue that has not been fully briefed. The issue has been fully briefed.

We are not persuaded that the issue is likely to arise again in similar factual circumstances. As long as the SEC rule, or some similar rule permitting stockholders to make proposals to stockholders' meetings, exists granting rights to minority shareholders to present matters to stockholders' meetings, the question whether, under Massachusetts...

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