Source: https://supreme.justia.com/cases/federal/us/426/148/case.html
Timestamp: 2016-12-07 20:13:15
Document Index: 289597191

Matched Legal Cases: ['§ 94', '§ 27', '§ 94', '§ 94', '§ 94', '§ 94', '§ 27', '§ 94', '§ 94', '§ 94', '§ 94', '§ 94', '§ 94']

Radzanower v. Touche Ross & Co. (full text) :: 426 U.S. 148 (1976) :: Justia U.S. Supreme Court Center Log In
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Radzanower v. Touche Ross & Co. 426 U.S. 148 (1976)
U.S. Supreme CourtRadzanower v. Touche Ross & Co., 426 U.S. 148 (1976)Radzanower v. Touche Ross & Co.*No. 75-268Argued March 30, 1976Decided June 7, 1976426 U.S. 148CERTIORARI TO THE UNITED STATES COURT OF APPEALS
(b) A pro tanto repeal of § 94 by implication is not indicated on the ground that the two Acts are irreconcilable, since the underlying purpose of the Securities Exchange Act (enacted 70 years after the National Bank Act) was, not to regulate the activities of national banks as such, but to promote fair dealing on the securities markets; and the broad § 27 venue provision was intended to further that goal by enabling enforcement suits to be brought wherever a defendant could be found, whereas the narrow § 94 venue provision was intended for the convenience of banking institutions, and to prevent interruption of their business that might result from their books being sent great distances. In the very few instances where actions for securities violations are brought against banking institutions, the requirement that suit be Page 426 U. S. 149 brought were the defendant is established is no insurmountable burden. Pp. 426 U. S. 154-157.
This case requires us to determine which venue provision controls in the event a national banking association is sued in a federal court for allegedly violating the Securities Exchange Act of 1934: the broad venue provision of the Securities Exchange Act, which allows suits under that Act to be brought in any district where the defendant may be found, or the narrow venue provision of the National Bank Act, which allows national Page 426 U. S. 150 banking associations to be sued only in the district where they are established.
"[a]ctions and proceedings against any [national banking] association under this chapter may be had in any district or Territorial court of the United States held within the district in which such association may be established. . . . [Footnote 1] "Page 426 U. S. 151
Following the settled law of the Second Circuit, the District Court granted the bank's motion to dismiss. It held that, "[a]bsent waiver or consent, a national bank may be sued only in the district in which it is established. 12 U.S.C. Section 94." The court noted that the bank was established in Boston "because its charter specifies Boston as its principal place of business," [Footnote 2] and it rejected the petitioner's claim that the bank had waived the provisions of § 94. [Footnote 3] The Court of Appeals affirmed without opinion. [Footnote 4] Because of differing views in the Circuits as to the statutory venue question presented, [Footnote 5] we granted the petition for certiorari. 423 U.S. 911. Page 426 U. S. 152
Mercantile Nat. Bank v. Langdeau, 371 U. S. 555, 371 U. S. 560. Accord, Michigan Nat. Bank v. Robertson, 372 U. S. 591; National Bank v. Associates of Obstetrics, 425 U. S. 460. [Footnote 6] The venue provision of the Securities Exchange Act, by contrast, allows suits under that Act to be brought anywhere that the Act is violated or a defendant does business or can otherwise be found. It is the petitioner's contention that, when a national bank is named as a defendant in a suit brought under the Securities Exchange Act, it loses the protection of the venue provisions of § 94 and may be sued in any federal judicial district where that Act was violated or where it does Page 426 U. S. 153 business or can be found. For the reasons that follow, we cannot accept that contention.
When Congress enacted the narrow venue provisions of the National Bank Act, it was focusing on the particularized problems of national banks that might be sued in the state or federal courts. When, 70 years later, Page 426 U. S. 154 Congress enacted the Securities Exchange Act, its focus was on the objective of promoting fair dealing in the securities markets, and it enacted a general venue provision applicable to the broad universe of potential defendants subject to the prohibitions of that Act. Thus, unless a "clear intention otherwise" can be discerned, the principle of statutory construction discussed above counsels that the specific venue provisions of § 94 are applicable to the respondent bank in this case. Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222.
Posadas v. National City Bank, 296 U. S. 497, 296 U. S. 503. It is evident that the "two acts" in this case fall into neither of those categories. Page 426 U. S. 155
H.R.Rep. No. 9229, p. 91 (1975). [Footnote 11] Page 426 U. S. 156 Its venue provision, § 27, was intended to facilitate that goal by enabling suits to enforce rights created by the Act to be brought wherever a defendant could be found. The venue provision of the National Bank Act, § 94, was intended, on the other hand,
By allowing suits against national banks to be brought only pursuant to § 94, the purposes of that section will obviously be served. Yet application of § 94 will not "unduly interfere" with the operation of the Securities Exchange Act. See Gordon v. New York Stock Exchange, 422 U. S. 659, 422 U. S. 686. Section 94 will have no impact whatever upon the vast majority of lawsuits brought under that Act. In the tiny fraction of litigation where its effect will be felt, it will foreclose nobody from invoking the Act's provisions. Members of the investing public will still be free to bring actions against national banks under the Act. While suits against this narrow and infrequent category of defendants will have to be brought where the defendant is established, that is hardly an insurmountable burden in this day of easy and rapid transportation. [Footnote 12] Since it is possible for the statutes to coexist in this manner, they are not so repugnant Page 426 U. S. 157 to each other as to justify a finding of an implied repeal by this Court. It is simply not "necessary" that § 94 be repealed in part in order "to make the Securities Exchange Act work." See Silver v. New York Stock Exchange, supra at 373 U. S. 357.
Moreover, it cannot be said either that "the later act covers the whole subject of the earlier one, and is clearly intended as a substitute," or that "the intention of the legislature to repeal [is] clear and manifest." 296 U.S. at 296 U. S. 503. The Securities Exchange Act of 1934 covers a "subject" quite different from the National Bank Act. The 1934 Act was enacted primarily to halt securities fraud, not to regulate banks. Indeed, banks were specifically exempted from many provisions of the securities laws, [Footnote 13] and Congress almost contemporaneously enacted other specific legislation dealing with the problems arising from banks' involvement in the securities business. [Footnote 14] The passage of that legislation and the exemption of national banks from important provisions of the securities laws suggest, if anything, that Congress was reaffirming its view that national banks should be regulated separately by specific legislation applying only to them. [Footnote 15] And there is nothing in the legislative history of Page 426 U. S. 158 the Securities Exchange Act to support the view that Congress, in enacting it, gave the slightest consideration to the pro tanto repeal of § 94, let alone to indicate "that Congress consciously abandoned its [prior] policy," Morton v. Mancari, 417 U.S. at 417 U. S. 551, or that its intent to repeal § 94 pro tanto was "clear and manifest,'" United States v. Borden Co., 308 U. S. 188, 308 U. S. 198, quoting Red Rock v. Henry, 106 U. S. 596, 106 U. S. 602. [Footnote 16]
In my judgment, a brief reference to the history, purpose, and language of these two special venue statutes will provide a better guide to their meaning than the exposition of the doctrine of implied repeal found in the treatise on statutory construction written by Sedgwick in 1874. Indeed, if Sedgwick were to be our guide, I would heed this advice: "When acts can be harmonized by a fair and liberal construction it must be done." [Footnote 2/1] Page 426 U. S. 159
The rule that the legislature presumably intended to give effect to the more specific statute could therefore be applied to support the petitioner, as well as the respondent bank, in this case. [Footnote 2/2] Similarly, without pausing to consider the reason why each statute was enacted, we might simply apply the rule that the more recent of two Page 426 U. S. 160 conflicting statutes shall prevail, [Footnote 2/3] rather than the rule that the special statute takes precedence over the general. But such abstract reasoning is less instructive than a consideration of the source and the need for the alleged conflict. Of special importance is an evaluation of the intent of Congress when it enacted these statutes.
The source of the special venue statute for national banks is the Act to Provide a National Currency enacted in 1863 [Footnote 2/4] and amended in 1864. [Footnote 2/5] When these statutes were enacted, Congress apparently assumed that the Page 426 U. S. 161 newly authorized national banks would not be subject to suit in state courts unless Congress gave its express consent. [Footnote 2/6] The fact that the statute was phrased in permissive language suggests that Congress' primary purpose was to give such consent. The mandatory construction given to that language a century later when the Court decided Mercantile Nat. Bank v. Langdeau, 371 U. S. 555, is consistent with that purpose, because it is unlikely that the Civil War Congress intended to authorize the several States to subject national banks to the potential harassment of defending litigation in places other than the county or city where the bank was located. [Footnote 2/7] This reason for placing a mandatory limiting construction on the authorization for suit in the state courts is not applicable to the separately enacted federal venue provision; for, in any event, the federal courts could only entertain such litigation against national banks as Congress might authorize.
In 1934, when Congress enacted the Securities Exchange Act, there was no reason for it to assume that the language in the special jurisdictional and venue provisions of that statute would not apply to national banks. Langdeau would not be decided until almost 30 years later, the language in the venue provision of the Civil War banking legislation was permissive, and there was no recognized policy reason supporting an exceptional venue privilege for national banks in federal litigation. There was no longer any doubt about the suability of national banks in either state or federal courts. Moreover, what once might have been regarded as the significant burden of requiring a fledgling bank to haul its records from one county to another within Page 426 U. S. 162 the State, would hardly justify treating banks differently from other litigants in the 20th century.
On the other hand, the special venue section included in the Securities Acts was specifically designed to implement an important legislative objective. Indeed, in construing the comparable provision in the 1933 statute, the Court held that its benefits are so crucial to the legislative purpose that they cannot be waived. [Footnote 2/8] In contrast, it is well settled that a national bank's special venue privilege is waivable. [Footnote 2/9] Manifestly, there is a Page 426 U. S. 163 difference between the importance of the policies underlying the two statutes.
But there is no necessary conflict. Since he two Acts can be harmonized by a fair and liberal construction, if we heed Sedgwick's counsel, that "must be done." As already noted, the actual wording of the earlier statute, which used the words "may be had" provides no conflict with a literal reading of the later Act. The conflict is created solely by this Court's interpretation of those words as, in effect, meaning that the trial of a case against a national bank "must be had" in the place specified by Congress, rather than the place specified by a state legislature. If we so read the statute, we need only conclude that any later enacted special venue statute which, by its own terms, applies to national banks should be read to mean what it says. Preoccupation with the ancient doctrine of implied repeal should not foreclose this simple construction of the plain language of the 1934 Act. [Footnote 2/10] Page 426 U. S. 164
The rule that repeals by implication are not favored, like all other canons of statutory construction, is merely one of the guidelines to observe in the search for a construction which will best reflect the real intent of the legislature. When we are dealing with a well established and clearly defined old rule, it is usually reasonable to suppose that the legislative intent to change such a rule would be unambiguously expressed. Or if we are dealing with an old rule that is an established and important part of our national policy, we must be sure that it is not changed simply by inadvertent use of broad statutory language. Thus, if Congress intended to modify the long-settled practice of preferential hiring of Indians on Indian reservations, [Footnote 2/11] or to limit the coverage of a statute as important as the Sherman Act, [Footnote 2/12] a court would require an unambiguous expression of intent to make such a change; without such an expression, it is reasonable to believe that inadvertence, rather than an intent to repeal, is the actual explanation for the broad language that arguably changes the old rule. [Footnote 2/13] But if neither the Page 426 U. S. 165 existence of, nor the reason for, the old rule is clear at the time of the later enactment, there is no special reason for questioning the legislative intent to have the later statute mean exactly what it says. Specifically, in this case, since it is clear that Congress intended national banks to be covered by some sections of the Securities Exchange Act, but not others, [Footnote 2/14] and since the purpose of authorizing a broader venue in this type of litigation applies with equal force to national banks and other defendants, the canon of construction strikes me as an unreliable guide for ascertaining the true intent of Congress.
Congress may well have simply overlooked the special venue provision in the Civil War statute, particularly since Langdeau had not yet been decided. It may therefore be accurate to describe the omission of any reference to the earlier statute in the legislative history of the later one as inadvertent. But that merely raises the question of whether it is more realistic to imply an exception to the applicable language of the 1934 Act or to conclude that, if Congress had thought about this preference for national banks, it nevertheless would have enacted the statute it did enact in 1934. There is no doubt in my mind that the 1934 Congress would have done exactly what it did do even if it had foreseen not Page 426 U. S. 166 only this Court's decision in Langdeau, but also the Court's willingness to construe the federal venue provision in the same "Draconian" fashion as the state provision, to use Judge Friendly's typically appropriate adjective. I could understand a legislative decision to exempt banks entirely from the coverage of the new law on the theory that an interest in the solvency of national banks entitles them to special immunity, but it seems wholly unrealistic to assume that Congress would treat banks like all other defendants for liability purposes and yet treat them differently for venue purposes.