Medical Committee for Human Rights v. Securities and Exchange Commission

The instant petition presents novel and significant questions concerning implementation of the concepts of corporate democracy embodied in section 14 of the Securities Exchange Act of 1934, and of the power of this court to review determinations of the Securities and Exchange Commission made pursuant to its proxy rules. For reasons to be stated more fully below, we hold that the Commission’s action in the present case is reviewable, and that the cause must be remanded for further administrative proceedings.

I. PROCEDURAL HISTORY OF THE CASE

On March 11, 1968, Dr. Quentin D. Young, National Chairman of the Medical Committee for Human Rights, wrote to the Secretary of the Dow Chemical Company,, stating that the Medical Committee had obtained by gift several shares of Dow stock and expressing concern regarding the company’s manufacture of the chemical substance napalm. 1 In part, Dr. Young’s letter said:

After consultation with the executive body of the Medical Committee, I have been instructed to request an amendment to the charter of our company, Dow Chemical. We have learned *662 that we are technically late in asking for an amendment at this date, but we wish to observe that it is a matter of such great urgency that we think it is imperative not to delay until the shareholders’ meeting next year. * * *

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We respectfully propose the following wording to be sent to the shareholders:

“RESOLVED, that the shareholders of the Dow Chemical Company request the Board of Directors, in accordance with the laws of the State of Delaware, and the Composite Certificate of Incorporation of the Dow Chemical Company, to adopt a resolution setting forth an amendment to the Composite Certificate of Incorporation of the Dow Chemical Company that napalm shall not be sold to any buyer unless that buyer gives reasonable assurance'that the substance will not be used on or against human beings.”

(App. la-2a.) The letter concluded with the following statement:

Finally, we wish to note that our objections to the sale of this product [are] primarily based on the concerns for human life inherent in our organization’s credo. However, we are further informed by our investment advisers that this product is also bad for our company’s business as it is being used in the Vietnamese War. It is now clear from company statements and press reports that it is increasingly hard to recruit the highly intelligent, well-motivated, young college men so important for company growth. There is, as well, an adverse impact on our global business, which our advisers indicate, suffers as a result of the public reaction to this product.

(App. 2a.) Copies of this letter were forwarded to the President and the General Counsel of Dow Chemical Company, and to the Securities and Exchange Commission. (App. 3a.)

By letter dated March 21, 1968, the General Counsel of Dow Chemical replied to the Medical Committee’s letter, stating that the proposal had arrived too late for inclusion in the 1968 proxy statement, but promising that the company would “study the matter and * * * communicate with you later this year” regarding inclusion of the resolution in proxy materials circulated by management in 1969. (App. 4a.) Copies of this letter, and of all subsequent correspondence, were duly filed with the Commission.

The next significant item of record is a letter dated January 6, 1969, noting that the Medical Committee was “distressed that 1968 has passed without our having received a single word from you on this important matter,” and again requesting that the resolution be included in management’s 1969 proxy materials. (App. 7a-8a.) The Secretary of Dow Chemical replied to this letter on January 17, informing the Medical Committee that Dow intended to omit the resolution from its proxy statement and enclosing an opinion memorandum from Dow’s General Counsel, the contents of which will be discussed in detail in part III, infra. (App. 9a-12a.) On February 3 the Medical Committee responded to Dow’s General Counsel, asserting that he had misconstrued the nature of their proposal in his opinion memorandum, and averring that the Medical Committee would not “presume to serve as draftsmen for an amendment to the corporate charter.” (App. 15a.) The letter continued:

We are willing to bend * * * to your belief that the management should be allowed to decide to whom and under what circumstances it will sell its products. Nevertheless, we are certain that you would agree that the company’s owners have not only the legal power but also the historic and economic obligation to determine what products their company will manufacture. Therefore, [we submit] * * * our revised proposal * * * requesting the Directors to *663 consider the advisability of adopting an amendment to the corporate charter, forbidding the company to make napalm (any such amendment would, of course, be subject to the requirements of the “Defense Production Act of 1950,” as are the corporate charters and management decisions of all United States Corporations), [and] we request that the following resolution be included in this year’s proxy statement:

“RESOLVED, that the shareholders of the Dow Chemical Company request that the Board of Directors, in accordance with the laws [sic] of the Dow Chemical Company, consider the advisability of adopting a resolution setting forth an amendment to the composite certificate of incorporation of the Dow Chemical Company that the company shall not make napalm.”

(App. 16a.) On the same date, a letter was sent to the Securities and Exchange Commission, requesting a staff review of Dow’s decision if it still intended to omit the proposal, and requesting oral argument before the Commission if the staff agreed with Dow. (App. 17a.)

On February 7, 1969, Dow transmitted to the Medical Committee and to the Commission a letter and memorandum opinion of counsel, which in essence reiterated the previous arguments against inclusion of the proposal and stated the company's intention to omit it from the proxy statement. (App. 18a-19a.) Shortly thereafter, on February 18, 1969, the Commission's Chief Counsel of the Division of Corporation Finance sent a letter to Dow, with copies to the Medical Committee, concluding that “[f]or reasons stated in your letter and the accompanying opinion of counsel, both dated January 17, 1969, this Division will not recommend any action * * * if this proposal is omitted from the management’s proxy material. * * * ” (App. 20a.) In a letter dated February 28 — which contains the first indications of record that petitioners had retained counsel — the Medical Committee again renewed its request for a Commission review of the Division’s decision. (App. 24a.) On the same day, the Medical Committee filed with the Commission a memorandum of legal arguments in support of its resolution, urging numerous errors of law in the Division’s decision. (App. 26a-32a.) Several other documents were filed by both the company and the Medical Committee; finally, on April 2, 1969, both parties were informed that “[t]he Commission has approved the recommendation of the Division of Corporation Finance that no objection be raised if the Company omits the proposals from its proxy statements for the forthcoming meeting of shareholders.” (App. 44a-45a.) The petitioners thereupon instituted the present action, and on July 10, 1969, the Commission moved to dismiss the petition for lack of jurisdiction. On October 13 we denied the motion “without prejudice to renewal thereof in the briefs and at the argument on the merits.”

In its briefs and oral argument, the Commission has-consistently and vigorously urged, to the exclusion of all other contentions, that this court is without jurisdiction to review its action. We find this argument unpersuasive.

II. JURISDICTION TO REVIEW

A. Timeliness

The Commission’s first argument on the jurisdictional point is that the instant petition was untimely filed, thereby depriving this court of power to adjudicate the controversy. This argument is based upon the provision of section 25(a) of the Securities Act, 15 U. S.C. § 78y(a) (1964), which requires that a petition for review must be filed “within sixty days after the entry” of a Commission order.

In the instant case the Commission’s minutes reflect that the decision which was reached after reviewing the petitioner’s proxy claim was made on March 24, 1969 (App. 46a), whereas the petition to review in this court was not filed un *664 til May 29, 1969 — some 66 days thereafter. It also appears uncontroverted that the Commission gave the Medical Committee some notification by telephone on March 24 that a decision had been reached, although the substance of this conversation is not reproduced in the briefs or record. (Cf. Supp. App. 3.) However, as we noted in the preceding section, petitioners did not receive any written information concerning the Commission’s decision until a letter was mailed to them on April 2; in addition, the Medical Committee has asserted, without contradiction, that the Commission temporized for approximately four weeks after the petitioner requested a formal copy of the minutes of the decision, before making this important information available. (Reply Brief for Petitioner at 14 n. 2 and accompanying text.)

It must be noted that the Commission is itself rather untimely in making this assertion of untimeliness, for in its July 10 Motion to Dismiss it explicitly disclaimed any intention to press upon us an argument relating to the time of filing the instant petition. 2 This resolve apparently fell by the wayside, however, and the timeliness argument appeared in full dress in the Commission’s responsive brief on the merits, thereby helping to trigger further rounds of briefing by both sides. We need not elevate the Commission’s vacillation to the status of a waiver, however, because we have con-eluded that its timeliness argument must fail on the merits.

The Commission relies primarily upon section 22 (k) of its Rules of Practice, 17 C.F.R. § 201.22(k) (1970), which provides :

In computing any period of time involving the date of the entry of an order by the Commission, the date of entry shall be (1) the date of the adoption of the order by the Commission * * * or (2) in the case of orders reflecting action taken pursuant to delegated authority, the date when such action is taken. * * * The order shall be available for inspection by the public from and. after the date of entry, unless it is a non-public order. A non-public order shall be available for inspection from and after the date of entry by any person entitled to inspect it. [Emphasis added.]

In essence, the Commission has taken the position that the date of decision, March 24, must be deemed the date of “entry” within the meaning of Rule 22 (k), notwithstanding the language of the rule italicized above, and notwithstanding the fact that no written information regarding the basis of the decision was available until a substantial time after March 24.

None of the cases cited by the parties offers much guidance in resolving the particular timeliness question now before us; 3 however, we think it *665 clear that Rule 22 (k), together with the 60-day statutory period for filing petitions for review, evidences an attempt by Congress and the Commission to strike a balance between the need to have Commission orders operate with finality, and the aggrieved party’s need to have both adequate notice of the substance of the decision, and sufficient time to prepare his petition. 4 To hold that the running of the 60-day period can be initiated by a mere telephone call, as the Commission urges, would create risk of inequity and hardship to aggrieved parties and defeat the goal of orderly and open administrative procedures embodied in the italicized portions of Rule 22 (k) quoted above. Therefore, we conclude that the instant petition for review is not barred for reasons of untimeliness.

B. The Existence of a Reviewable Order

The most difficult problems presented by this case arise from a congeries of related arguments supporting the general assertion that the Commission’s decision regarding the Medical Committee’s proxy proposal is not a reviewable order within the relevant jurisdictional statute. That statute is section 25(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78y(a) (1964), which in pertinent part states:

Any person aggrieved by an order issued by the Commission in a proceeding under this chapter to which such person is a party may obtain a review of such order * * * in the United States Court of Appeals for the District of Columbia [Circuit], by filing in such court, within sixty days after the entry of such order, a written petition praying that the order of the Commission be modified or set aside in whole or in part.

Neither precedent 5 nor the legislative history of the Securities Act 6 offers an *666 unambiguous answer to the question of whether decisions of the kind presently before us should be categorized as reviewable orders under this provision; thus, we must resort to general principles and analogies in determining whether we have jurisdiction to adjudicate this controversy.

Bypassing for the moment the question of whether deference to administrative discretion should compel us to foreclose review of this petition, 7 we begin by restating the well-established principle that there is a strong presumption in favor of the courts’ power to review administrative action. As the Supreme Court concluded in Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967), “[A] survey of our cases shows that judicial review of a final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress.” This theme has been developed at greater length by Professor Jaffe in his study of the law of reviewability :

Congress, barring constitutional impediments, may indeed exclude judicial review. But judicial review is the rule. * * * It is a basic right; it is a traditional power and the intention to exclude it must be made specifically manifest. * * *

* * * * *

* * * The mere fact that some acts are made reviewable should not suffice to support an implication of exclusion as to others. The right to review is too important to be excluded on such slender and indeterminate evidence of legislative intent.

“L. JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 346, 357 (1965) [hereinafter “L. JAFFE”]. See also Environmental Defense Fund, Inc. v. Hardin, 138 U.S.App.D.C. 391, 428 F.2d 1093, 1097, 1098 (1970); Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App.D.C. 371, 424 F.2d 859 (1970) ; 4 K. Davis, Administrative Law Treatise 1-32 (1958).

Several other general observations which we have gleaned from our perusal of numerous cases and commentaries on reviewability must serve as prolegomena to our discussion of that issue in the present case. It appears that the factors most often relied upon in determining whether a particular administrative action is a reviewable order can be subdivided into two general categories. The first of these basic areas of concern involves consideration of whether the administrative action operates with final effect upon a particular individual, entity, or group. 8 See, e. g., Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507 (1967); Is *667 brandtsen Co. v. United States, 93 U.S.App.D.C. 293, 298, 211 F.2d 51, 55, cert. denied, Japan Atlantic & Gulf Conference v. United States, 347 U.S. 990, 74 S.Ct. 852, 98 L.Ed. 1124 (1954); L. Jaffe, 358, 403-404. The second line of analysis looks to the formalities preceding and attending the administrative action, for, as one commentator has stated, “the notion of an ‘order’ implies some formal characteristics.” L. Jaffe 419; cf. Helco Products Co. v. McNutt, 78 U.S.App.D.C. 71, 137 F.2d 681 (1943); American Sumatra Tobacco Corp. v. SEC, 68 App.D.C. 77, 93 F.2d 236 (1937). Finally, the cases in the area seem virtually unanimous in proclaiming that pragmatic considerations, particularly those relating to the institutional relationships between the courts and the administrative agencies, must prevail over purely doctrinal arguments for or against reviewability. See, e. g., Abbott Laboratories, supra, 387 U.S. at 149, 87 S.Ct. 1507; American Federation of Labor v. NLRB, 308 U.S. 401, 408, 60 S.Ct. 300, 84 L.Ed. 347 (1940); Cities Service Gas Co. v. FPC, 255 F.2d 860, 862 (10th Cir.), cert. denied, Magnolia Petroleum Co. v. Cities Service Gas Co., 358 U.S. 837, 79 S.Ct. 61, 3 L.Ed.2d 73 (1958); Isbrandtsen Co., supra, 93 U.S.App.D.C. at 297, 211 F.2d at 55.

While the problem of whether there is sufficient formality is admittedly difficult in the present case, we need not pause long over the question of the decision’s final effect upon petitioner. Here the administrative process had run its course with respect to petitioner’s proxy proposal, and there can be no basis for any fear that review of the decision would cause the courts “to interfere in matters yet within the consideration of the Commission.” Cities Service Gas Co., supra, 255 F.2d at 862. Here, also, we are dealing with a limited and easily identifiable class of individuals — shareholders of a regulated corporation— whom Congress sought to protect in section 14 of the Act, and who claim that they are wrongfully being denied fair corporate suffrage by the Commission’s approval of Dow’s decision to omit their proposal. Cf. Jaffe, The Individual Right to Initiate Administrative Process, 25 Iowa L.Rev. 485, 528 (1940). In this regard, we cannot see any merit in the Commission’s contention that the petitioner has not suffered any “aggrievement” under the jurisdictional statute because it may still have relief through a private action against the company in a district court. The relevance of a possible private action will be examined more fully later in this portion of our opinion. For present purposes, it is sufficient to note that the Medical Committee has been forced to undergo a two-stage administrative proceeding, compelled by the risk that failure to do so would preclude any judicial relief by virtue of the exhaustion doctrine; 9 its recourse to an authoritative judicial determination of the merits of its proxy proposal has been substantially delayed because of the administrative proceeding, whereas time is clearly of the essence in proxy contests; and not only has the Medical Committee lost the potential benefit of the Commission’s resources and expertise as an ally in compliance litigation against the company, it has also had imposed upon it the added burden in a private action of overcoming an adverse Commission determination in face of the principle that the agency is entitled to judicial deference in the construction of its proxy rules. See, e. g., Union Pacific R. Co. v. Chicago & N. W. Ry. Co., 226 F.Supp. 400, 408 (N.D.Ill. 1964). Moreover, we believe that there is a substantial public interest in having important questions of corporate democracy raised before the Commission and the courts by interested, responsible private parties. Cf. Scanwell Laboratories, Inc. v. Shaffer, supra, 137 U.S.App.D.C. at 375-376, 424 F.2d at 863-864 (1970); Environmental Defense Fund, Inc. v. Hardin, supra, 138 U.S.App.D.C. at 394-395, 428 F.2d at 1096-1097 (1970). *668 Thus, we conclude that the Medical Committee is “aggrieved” for purposes of section 25(a) of the Act.

Finally, in the context of assessing the reviewability of the Commission’s decision — as distinguished from our later inquiry into the scope of administrative discretion — it is clear that no significance whatsoever inheres in the fact that the administrative determination is couched in terms of a “no action” decision rather than in the form of a decree binding a party to perform or refrain from some particular act. This much has been clear ever since the Supreme Court interred the discredited “negative order doctrine” in Rochester Telephone Corp. v. United States. 10 That case, like the present controversy, involved a petitioner’s attempt to obtain judicial review of “action by the Commission which affects the complainant because it does not forbid or compel conduct with reference to him by a third person.” (307 U.S. at 135, 59 S.Ct. at 759.) The Court pointed out that “[njegative has really been an obfuscating adjective” because it failed to illuminate “the real considerations on which rest * * * the reviewability of Commission orders within the framework of its discretionary authority and within the general criteria of justiciability.” (307 U.S. at 141, 59 S.Ct. at 762.) The Court then concluded:

An order of the Commission dismissing a complaint on the merits and maintaining the status quo is an exercise of administrative function, no more and no less, than an order directing some change in status. * * * Refusal to change an existing situation may, of course, itself be a factor in the Commission’s allowable exercise of discretion. * * * But this bears on the disposition of a case and should not control jurisdiction.

(307 U.S. at 142, 59 S.Ct. at 763.) Similarly, section 10(e) of the Administrative Procedure Act provides judicial relief for “agency action unlawfully withheld or unreasonably delayed” (5 U.S.C. § 706(1) (Supp. Y 1965-69)), and the courts have had little difficulty in determining when an administrative failure to act presents an appropriate occasion for judicial scrutiny. Compare Environmental Defense Fund v. Hardin, supra, with International Ass’n of Machinists & Aerospace Workers v. NMB, 138 U.S.App.D.C. 96, 425 F.2d 527 (1970); see generally Goldman, Administrative Delay and Judicial Relief, 66 Mieh.L.Rev. 1423 (1968). Thus, there can be little doubt that the Commission’s decision operates with sufficient particularity and finality to warrant judicial review.

The question of whether the procedures attending the Commission’s decision in this case are sufficiently formal to make the determination a reviewable order, under section 25(a) is admittedly a close one, but we believe that the considerations militating in favor of reviewability must prevail. At the outset, we note that the decided cases make it clear beyond doubt that the absence of a formal evidentiary hearing does not compel the conclusion that an administrative decision is unreviewable. See, e. g., Cities Service Gas Co. v. FPC, 255 F.2d 860, 862-863 (10th Cir.), cert. denied, 358 U.S. 837, 79 S.Ct. 61 (1958); Phillips Petroleum Co. v. FPC, 227 F.2d 470, 475 (10th Cir. 1955), cert. denied, Michigan Wis. Pipe Line Co. v. Phillips Petroleum Co., 350 U.S. 1005, 76 S.Ct. 649, 100 L.Ed. 868 (1956); Isbrandtsen Co. v. United States, 93 U.S.App.D.C. 293, 297, 211 F.2d 51, 55, cert. denied, 347 U.S. 990, 74 S.Ct. 852 (1954). This is a sound and necessary doctrine because agencies frequently are J confronted with situations in which sub-/ stantial questions of fact, law, or policy may be properly resolved through information-gathering mechanisms less cumbersome than a trial-type hearing. This court has consistently recognized *669 that this kind of flexibility in procedures is a desirable attribute of the administrative process, regardless of whether the power was explicitly provided by statute or rule, or waá evolved on an ad hoc basis by implication from a broad statutory grant. However, our deference to the efficient deployment of administrative resources has not been— and logically could not be — considered a matter which touches upon the courts’ jurisdiction to review the action in question, in the absence of a clear indication that Congress intended such a result. See generally National Air Carrier Ass’n v. CAB, No. 23,012 (D.C.Cir. May 28, 1970); H & B Communications Corp. v. FCC, 137 U.S.App.D.C. 70, 420 F.2d 638 (1969); Marine Space Enclosures, Inc. v. FMC, 137 U.S.App.D.C. 9, 420 F.2d 577 (1969). Thus, we must look to the Commission’s rules and to the attributes of the proceeding here in issue in order to determine whether this is an appropriate occasion for review.

Although the line is not drawn with complete clarity, the Commission’s Rules of Practice distinguish between “formal” and “informal” proceedings. Procedures denominated “informal” by the Commission generally involve negotiation between the Commission and one private party, and normally culminate in a letter of advice to the party from a Commission staff member. 11 Here, however, there is an important difference which the Commission readily concedes:

The difference is that in the normal no-action situation, there is only one interested private party and accordingly the Commission has not found it necessary to prescribe any rules dealing with the situation. The private party simply writes a letter which is answered.

In the case of stockholder proposals, there are two interested private parties: the management and the shareholder. Consequently, Rule 14a-8(d) provides a procedure by which the position of both may be brought to the Commission’s attention.

(Supplementary Memorandum of Respondent at 10.) Thus, the Commission’s procedural regulations governing *670 proxy proposals incorporate the basic theory of an adversary encounter, and a detailed perusal of Rule 14a-8 and its history reinforces this impression.

For the shareholder who wishes to have his proposal included in management’s proxy statement, Rule 14a-8, 17 C.F.R. § 240.14a-8 (1970), is the touchstone of procedural and substantive rights. Rule 14a-8(a) describes the initiation of this process by providing that the security holder “shall submit to the management of the issuer, within the time hereinafter specified, a proposal which is accompanied by notice of .his intention to present the proposal for action at the meeting.” The basic time period established in this section is 60 days, subject to certain qualifications. Subsection (b) then provides that if management opposes the shareholder’s proposal, it must include in its proxy materials a 100-word statement by the proponent of the proposal. The substantive exceptions to the general rule of inclusion are then set forth in subsection (c), and several of these grounds for omitting a shareholder proposal will be discussed at length in part III, infra. The following provision, subsection (d), contains the procedural steps which are immediately relevant; it describes the course of proceedings which comes into play whenever management believes that it is entitled under the substantive criteria of the preceding section to omit a shareholder proposal.

Subsection (d) is phrased wholly in mandatory rather than permissive language. It requires management to “file with the Commission * * * a copy of the proposal and any statement in support thereof as received from the security holder, together with a statement of the reasons why the management deems such omission to be proper in the particular case, and, where such reasons are based on matters of law, a supporting opinion of counsel.” At the same time, management must “notify the security holder submitting the proposal of its intention to omit the proposal” and “forward to him a copy of the statement of the reasons why the management deems the omission of the proposal to be proper and a copy of such supporting opinion of counsel.” This filing and forwarding must be completed “not later than 20 days prior to the date the preliminary copies of the proxy statement are filed pursuant to § 240.14a-6(a)”; this requirement was promulgated “[s]o that the Commission will have more time to consider the problems involved in such cases and the security holder will have an opportunity to consider the management’s position and take such action as may be appropriate.” 19 Fed. Reg. 246 (1954). Presumably this “other appropriate action” by the shareholder encompasses the possibility of filing with the Commission detailed legal arguments in favor of requiring the company to include the proposal, similar to the one which the Medical Committee filed with the Commission in the present case after the Division of Corporation Finance had made its recommendation, and which the Commission accepted without comment or objection. (App. 26a-32a; see also id. at 38a-39a.) Finally, the history of the rule explicitly states that it “places the burden of proof upon the management to show that a particular security holder’s proposal is not a proper one for inclusion in management’s proxy material.” (19 Fed.Reg. 246 (1954).)

We think that these provisions contain persuasive indicia that the Commission’s proxy procedures are possessed of sufficient “adversariness” and “formality” to render its final proxy determinations amenable to judicial review, although the scope and content of that review must yet be investigated. This conclusion is inferentially supported by cases dealing with private actions to enforce the proxy rules, in which shareholders have been required to exhaust the administrative remedies provided by the foregoing sections. Peck v. Greyhound Corp., 97 F.Supp. 679 (S.D.N.Y. 1951); cf. Dyer v. SEC, 291 F.2d 774, 778 (8th Cir. 1961). However, the Commission urges that the structure of section 14 of the Act gives rise to a doc *671 trinal anomaly if administrative decisions like the present one are held reviewable. This difficulty arises from the fact that even when the Commission moves against recalcitrant management under section 14 of the Act to terminate or prevent violations of the proxy rules, there is never a traditional trial-type hearing followed by a conventional mandatory order. Professor Loss has catalogued the Commission’s enforcement alternatives under section 14 as follows:

[W]hen management or a security holder is adamant in refusing to comply with the rules as the Commission construes them, there is no administrative procedure comparable to the stop-order proceeding under the 1933 act. The Commission may investigate. It may use its statutory power to “publish information concerning * * * violations,” as it did in two early instances. It may institute appropriate administrative proceedings of a disciplinary nature under the 1934 act when the offender happens to be a registered broker-dealer or an exchange member, as it may when some other statutory provision or Commission rule has been violated. It may even use a violation of section 14(a) as a basis for delisting the security. And it may ask the Attorney General to prosecute willful violations. But the principal sanction — and the only practicable way of forcing compliance —is the statutory action for injunction.

Loss, The SEC Proxy Rules in the Courts, 73 Harv.L.Rev. 1041, 1043-1044 (1960); see also Aranow & Einhorn, Corporate Proxy Contests: Enforcement of SEC Proxy Rules by the Commission and Private Parties, 31 N.Y.U.L.Rev. 875, 886, 886-887 n.50 (1956).

We see little force in this anomaly— if, indeed, it is in fact an anomaly. Through section 14 of the Act Congress has invested the Securities and Exchange Commission with sweeping authority to regulate the solicitation of corporate proxies; the few words employed by Congress in subsection (a) of this provision confer upon the Commission much power, but little guidance or limitation:

It shall be unlawful for any person, by the use of the mails or by any means or instrumentality of interstate commerce * * * or otherwise, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, to solicit or to permit the use of his name to solicit any proxy * * * in respect of any security (other than an exempted security) registered pursuant to * * * this title.

(15 U.S.C. .§ 78n(a) (1964).) Pursuant to this broad mandate, the Commission has established elaborate procedures which are of unquestioned validity for present purposes and which, as we have indicated above, otherwise possess sufficient attributes of finality and formality to warrant judicial review. Viewing the proxy rules in this light, we see no substantial reason why the absence of formal adjudicatory hearings in the regulatory scheme should render Commission decisions, however capricious or erroneous, utterly immune to direct judicial review or redress. Indeed, it seems doubtful that there is any meaningful distinction between review in this situation and review in the commonly accepted context of judicial assessment of final agency determinations made well in advance of, or in collateral proceedings relating to, a statutorily prescribed trial-type hearing. See, e. g., Phillips Petroleum Co. v. FPC, supra, 227 F.2d at 475; Isbrandtsen Co. v. United States, supra, 93 U.S.App.D.C. at 297, 211 F.2d at 55.

On the other hand, we do see significant problems and anomalies which would result from accepting the Commission’s restrictive interpretation of the jurisdictional statute. There is no doubt that the Medical Committee could obtain a judicial determination of the legitimacy of its claim through a private action against Dow Chemical in the dis *672 trict court; the Supreme Court held that such a remedy is implicit in section 14(a) in J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). The essential question, then, is whether the district court is a more appropriate forum for adjudication of petitioner’s claim than this court. We believe that every substantial consideration in this case leads to precisely the opposite conclusion.

Here the Medical Committee does not seek to contest any matters of fact which would require a trial de novo; rather, petitioner seeks only to have its proposal assessed by the Commission under a proper interpretation of the governing statutes and rules. The petitioner does not seek any relief which is peculiarly within the competence of the district court; instead, it seeks merely to have the cause remanded so that the Commission, in accord with proper standards, can make an enlightened determination of whether enforcement action would be appropriate. Thus we see no practical or theoretical virtues in commanding a course of action which “would result in equal inconvenience” to the petitioner, the Commission, and the overcrowded courts, and “would constitute circuitous routes for the determination of issues easily and directly determinable by review in this court.” American Sumatra Tobacco Corp. v. SEC, 68 App.D.C. 77, 82, 93 F.2d 236, 241 (1937). See also Gardner v. Toilet Goods Ass’n, Inc., 387 U.S. 167, 191-1