Document: 45 L.Ed.2d 463 95 S.Ct. 2598 422 U.S. 659 Richard A. GORDON et al., Petitioners,v.NEW YORK STOCK EXCHANGE, INC., al. No. 74—304. Argued March 25 and 26, 1975. Decided June Syllabus Petitioner, individually on behalf of an asserted class small investors, filed suit against respondents—the New York Stock Exchange, the American two member firms Exchanges—claiming that system fixed commission rates utilized by Exchanges at time for transactions less than $500,000 violated §§ 1 2 Sherman Act. The District Court Appeals both concluded were immunized from antitrust attack because authority Securities Exchange Commission (SEC) under § 19(b)(9) Act 1934 to approve or disapprove exchange its exercise power. Held: rates, which is active supervision SEC, beyond reach laws. Pp. 663-691. (a) statutory provision authorizing regulation 19(b)(9), SEC's long regulatory practice in reviewing proposed rate changes making detailed studies culminating adoption a rule requiring transition competitive continued congressional approval over all show Congress intended leave fixing reasonable SEC. (b) To interpose laws, would bar as per se violations Act, face positive SEC action, unduly interfere with operation Hence, implied repeal laws necessary make work intended, since failure imply render nugatory. Silver v. 373 341, 83 1246, 10 389; Ricci Chicago Mercantile 409 289, 93 573, 34 525 distinguished. 682-691. 498 F.2d 1303, (2nd Cir.) affirmed. I. Walton Bader, City, petitioners. Howard E. Shapiro, Washington, D.C., United States, amicus curiae, special Court. William Eldred Jackson, respondents. Lawrence Nerheim, Commission, Mr. Justice BLACKMUN delivered opinion This case presents problem reconciliation federal scheme particular context securities exchanges their members using commission. States Southern Second Circuit Commission's * In early 1971 petitioner Gordon, this Inc. (NYSE), (Amex), Exchanges.1 complaint challenged variety rules practices and, particular, claimed $500,000, 26 Stat. 209, amended 15 U.S.C. 2. Other challenges focused (1) volume discount trades 1,000 shares, presence negotiated rather excess $500,000;2 (2) limiting number memberships; (3) denying discounted nonmembers facilities.3 3 Respondents moved summary judgment ground actions subject overriding 19(b) 1934, 48 898, amended, 78s(b), therefore, not strictures granted respondents' motion claims. 366 F.Supp. 1261 (1973). Dismissing membership limitation Robinson-Patman contentions without merit,4 court relationship between mandates. It framework analysis immunity regulated area was established decade ago 389 (1963). Since authorized supervise 'in respect such matters . commission,' held applicable reserved those cases where 'review self-regulation (is) provided through vehicle other laws.' U.S., 360, 1258. further noted had substantial challenge after enactment been engaged study structure decade, requirement abolition May 1, 4 On appeal, 1303 (1974). Characterizing petitioner's frivolous, appellate devoted immunity. It, too, used basis analysis. Because given specific review power language, legislative history, policy actual supervisory power, determined differed Silver, proper. 5 By his petition certiorari, sought only determination are vital importance question, urging parties, we certiorari. 419 1018, 491, 42 291 II 6 Resolution issue may be made adequately upon thorough investigation light restrictions decided cases. We begin brief history industry. 7 stock have set agreement establishment first country. formed Buttonwood Tree Agreement 1792, beginning minimum fees observed members. That itself stated: 8 "We Subscribers, Brokers Purchase Sale Public Stock, do hereby solemnly promise pledge ourselves each other, will buy sell day any person whatsoever, kind one-quarter cent. Specie value, give preference our Negotiations." F. Eames, 14 (1968 ed). 9 See generally, R. Doed, Monopoly Power reprinted Hearings S. 3169 before Subcommittee Senate Committee Banking, Housing Urban Affairs, 92d Cong., 2d Sess., 405, 412—427 (1972). Successive constitutions NYSE carried forward basic provision. Similarly, when Amex emerged 1908—1910, pattern adopted there. These policies unnoticed responsible bodies. For example, House Banking Currency, general undertaken 1913, reported 'rigidly enforced' order 'to prevent competition amongst members.' H.R.Rep. 1593, 62d 3d 39 (1913).5 report, known Pujo Report, did recommend change policy, believed 11 'The present reasonable, except stocks, say, $25 should protected law it shall incorporated lower service threaten responsibility A very low also promote speculation destroy value membership.' Id., 115—116. 12 Despite monopoly few exchanges, exhibited but wide aspects, remained essentially self-regulating significant until 881, 78a seq. At lengthy hearings some attention anticompetitive features. S.Res. 84 (72d Cong.) 56 97 (73d 73d 1st pts. 13, 15, 16, pp. 6075, 6080, 6868, 7705 (1934) (hereafter Hearings). 72d pt. p. 85 (1932); H.R. 7852 8720 Interstate Foreign Commerce, 320—321, 423 (1934). 13 Perhaps most pertinent testimony preparatory proferred Samuel Untermyer, formerly chief counsel committee drafted Report. commenting 2693, Untermyer although bill provide right prescribe uniform commission, does otherwise authorize fix seems me striking out word 'uniform.' permit rates. business transacted has increased manyfold. Great fortunes brokers monopoly. public no access way buying seat paying large sum it. Therefore Probably something But institution. greatest financial agency world, controlled commissions charged either governmental supervised authority. As now stand, can charge traffic bear, burden commerce.' 7705. 16 finally enacted, apparently reflected suggestion, gave insure 'reasonable' Section provided: 17 '(b) authorized, if appropriate request writing national effect own specified practices, notice opportunity hearing, determines so requested, protection investors fair dealing traded administration exchange, regulations alter supplement (insofar changes) (9) interest, listing, charges.' (Emphasis added.) 18 conformed Act's coupled oversight ninth category one specifically enumerated. Merrill Lynch, Pierce, Fenner & Smith Ware, 414 117, 127—128, 94 383, 390, 38 348 (1973), observed: 19 'Two types Some provisions impose direct requirements prohibitions. Among these mandatory registration, broker dealer borrowing, prohibition manipulative deceptive practices. flexible rely technique acheive objectives. Supervised self-regulation, consonant traditional private governance allows Government monitor interest.' 20 reports confirm while development governing enumerated 19(b), left themselves instance, could compel felt public. 1383, (1934); S.Rep. 792, latter id., registered required 'complete information' regarding rules. III 21 With mind, turn post-1934 experience Amex. After 78f, proceeded just they prior App. A42, A216. changed periodically Exchanges,6 submission pursuant 6(a)(4), 78f(a)(4), Rule 17a—8 CFR 240.17a—8. Although several appear effectuated comment instances thoroughly exercised powers. Thus, 1958 determine whether 'reasonable accordance standards contemplated 1934,' announced Release 5678, Apr. 14, 1958, A240. resulted reduce certain transactions, engage collaboration greater advance changes. 5889, Feb. 20, 1959, A247. stated view responsibilities duties imposed including relating rates.' Ibid. 22 Under subsection (d) (which added 1961, 75 465), directed investigate adequacy investors. Accordingly, began year. 1963 released conclusions six-volume study. Report Special Study Markets, H.R.Doc. 95, 88th Sess. study, among things, problems procedures, setting levels. 5, 102. found rigid based round lot causing 'questionable consequences,' 'give-ups' providing services large, usually institutional customers. attempts indirectly achieve alterations more difficult clouded cost data effects necessitate complete structure. Moreover, methods determining reasonableness need overhaul. Not there information about economics articulation criteria important arriving produce major immediate levels, constitute careful essential future 23 Meanwhile, into aspect discounts A219—A220. various needed, recommended responded agreement. Letter dated Dec. 22, 1965, Chairman Cohen President Funston, A249. next years final presented 1968. A253.7 24 1968, continuing started earlier submit series proposals require implementation exchanges. Through 8324, 28, A286, requested revise schedule, reduction orders lots 400 shares or, alternatively, elimination $50,000. viewed interim measures, pending consideration consider embodied Haack, A285. response communications, (and Amex) eventually exceeding well approved See, e.g., letter Aug. 30, A310; memorandum Sept. Structure, A104. Members faced declines profits late 1960's 1970. attributed due, least part, fact 1958. Statement 1970, Haack A313. lesser $15 50% fewer measure restore health bringing line costs. Proposed A331. Mar. 19, NYSE, A327. proposal, submitted 17a—8, permitted placed 90-day basis. 2, Budge A333. Continuation thereafter 8923, July A336. 1972. begun Finding 'minimum size neither nor appropriate,' object portions above level. 3, 1971, Commissioner A353. 9007, Oct. A348. supporting $100,000 cutoff below allowed, ibid., later use breakpoint. year's figure, point $300,000 April Future Structure 1972, A369, A387, A388 (Policy Study). 27 1972 Policy emphasized markets, cause prevailing noted: 28 'Our concern level side well. Of these, perhaps following: 29 '(a) Dispersion trading listed securities. 30 Reciprocal kinds. 31 '(c) Increasing pressure institutions.' A385. 32 period time, however, possible revenue decline hasty made, rush Rather, switching gauged step-by-step basis, 'at measured, deliberate pace.' A387. result introduction commissions, depending order. result, institute $300,000—$500,000 range 33 Further followed relatively quickly. 29, 1973, considering breakpoint $100,000. Central Market System 3. June, schedules, stimulated part increase 15% current $5,000 $300,000, (below $5,000) 10206, 6, Documentary Appendix Brief Amicus Curiae (Doc.App.). Three months later, completion hearings, allow increases. 10383, 11, 1973,8 Doc.App. 27. announced, '(i)t act promptly terminate 1975, adopt achieving result.' 28. Elaboration rationale phasing soon forthcoming. December Garrett temporary (through 1975) inflation operating Exchanges, consequently severe losses 10560, 29. Indeed, increase, 'the deterioration capital positions many foreseeable, impairment indirect, consequential, harm likely 36. forestall possibility industry impaired during requirements. suggestion Senator Williams, Affairs. statement 27, Williams cited 10560 n. 12, 37. purporting elucidate fully reasons abolishing suggest considerations decision: heterogeneous nature brokerage industry; desirability insuring on, off, Exchanges; doubt subsidized system; forced required. 35 amendment nonmember $2,000. 10670, 7, 1974, 42. intramember 1974. 10751, 23, 45. 11019, 60. 36 '(I)t presently appears require, requiring, eliminated.' 63. 37 formally When negative responses received others, Rules 19b—3 10b—22. 19b—3, effective prohibit compelling explicitly nothing therein arrangements agreements 10b—22 brokers, dealers, 11073, 24, 65. Upon conclusion rules, 11203, Jan. 109. Effective sizes persons 1976, competitives well, i.e., floor Competition deferred 1976 orderly transition.9 competition, best interests investing economy. simplistic notion favor demonstrated deficiencies Specifically mentioned factors rigidity delay inherent system, potential distortion, evasion, conflicts fragmentation markets caused system. Acknowledging bad periods use, declined commit permanent cases: circumstances might arise indicate reinstitution areas appropriate. dismissed arguments raised proponents status quo. First, deemed destructive slim, curve industry.10 Second, maintenance fact, subsidies beneficial markets. unlikely reaped subsidy higher larger separation Nor believe regional substantially benefited Third, exodus unlikely, dealt occurred. event, inasmuch anticipated orders, arose effectively resolved consideration. 40 During concentrated action lasting committees undertook matter Early must eliminated institution-size 'unbundled' having full services. Industry (For Period Ended 4, 1972), (1972) (containing report Securities). objected particularly 'fair economic' 59, distortion institutionally oriented firms. 41 perturbed reasons. litigation taken position merely failed new 58, referring Independent Investor Protective League (SDNY 71—1924), (CA2 1971). posture precluded Appeals.11 displeased length took decisions feared statements lacked clarity perpetuated uncertainty Therefore, stressed: phased systematic manner, date institutional-size serious distortions. Based Subcommittee, achieved eliminating $100,000.' Study, supra, 43 issued six interest replaced competitively sizes. Such occur 'without excessive delay.' 92—1519, xiv, 141, 144—145, 146 prodding take quick measures introduce sizes, defer enacting legislation progress being made. costs benefits versus gained hearings. 131—146, related Industry, Commerce Finance serials 92—37 92—37h (1971—1972). analysis, introduced transaction S.Doc. 93—13, 5—7, 43—63 44 1975 Houses enact directly bills initially passed chamber somewhat, Conference compromised differences. Compare 4111, 6(p), discussed 94—123, 51—53, 67—68 (1975), 249, 6(e), 94—75, 71—72, 98 U.S.Code Cong. Admin.News 613. measure, compromised, signed 89 97. amends substitute heretofore existing self-regulatory organizations. Reference newly generally 'no schedule allowances, discounts, 107. An exception 1976. exceptions ban findings: November finds interest,' 6(e)(1)(A); relation (to published SEC), 'do furtherance purposes title, taking permitting weighed lawful title.' 6(e)(1) (B)(ii). statute provides even exceptions, abrogate 'are longer accomplish 6(e)(2). 46 section procedure follow decision 6(e)(4). described 'comparable Federal Trade (s) formal normal rulemaking 553 title 'on record' Section(s) 556 557 U.S.C.' H.R.Conf.Rep. 229, 108 Code 773. Finally, amendments file regularly 31, branches Congress, concerning 6(e)(3).12 47 effectuated. still total alteration, disastrous public, industry, summarized briefly: clear 'fixing commission.' protect dealing, permission occurred seven Court's Trenton Potteries Co., 273 392, 377, 71 L.Ed. 700 (1927), price violation adoption, primarily last years, recently expressing dissatisfaction implementing content proceed legislation. order, abolished And legislation, enacted codifies discretion reimpose warranted. IV 49 considered schemes procedures. Certain axioms construction clearly established. Repeal implication favored casually allowed. Only 'plain repugnancy provisions' implied. Philadelphia National Bank, 374 321, 350—351, 1715, 1734—1735, 915 126, S.Ct., Hughes Tool Co. Trans World Airlines, Inc., 363, 385—389, 647, 662, 577 (1973); Carnation Pacific Conference, 383 213, 217—218, 86 781, 784—785, 709 (1966); 357—358, 1257—1258; Borden 308 188, 198—199, 60 182, 188—189, 181 (1939). Assn. Dealers, 694, 719—720, 729—730, 2427, 2443, 2447—2448, 486. 50 starting case, viz., impliedly repealed administrative course, Silver. There ordering remove telephone connections offices nonmembers. absent derived 347, 1251. Concluding proper approach reconcile scheme, 'guiding principle' achievement reconciliation. principle, '(r)epeal regarded work, then extent necessary.' 357, 1257. 51 factual jurisdiction applications 52 'Although gives impliedly, see enforcement rules.' 53 decided, constitution discontinuance wire office time. While permissible regulating relationships nonmembers, forbid regulate application undesirable effects; exchange's method competition. 54 Court, absence prevented conflict arising Georgia Pennsylvania 324 439, 455—457, 65 716, 1051 (1945), agency, (the Commission) rate-fixing combination involved. cautioned, '(s)hould different exemption presented.' amplified footnote: 55 'Were ensuing judicial scrutiny ruling designed activity, decide today.' 358, patent is, indeed, 'different case' referred. contrast alteration supplementation 'necessary dealings exchange.' brought role years. presenting impotence affect circumstances, involves explicit authorization resultant activity. 57 Having case,' inquiry statutes involved here, keeping mind principle 'implied hold satisfied here. urged Gordon interfere, view, 58 threshold matter, courts, courts claims raised. exemplifies responsibility. cases, involved, advantage expertise. end, courts. 306—308, 582—584, 59 suggests ultimately decide, record. record, compiled motions judgment, though voluminous, said inadequate resolution question. disagree. trial merits. us activities, debates sufficient informed existence repeal. Our disposition differs Seventh Thill Corp. 433 264 (1970), cert. denied, 401 994, 91 1232, 532 (1971), NYSE's antirebate denied. reversed grant remanded evidence degree work. F.2d, 270. persuasively distinguishable grounds bar: rule. items reasonably thought necessarily apply uniformly, applied discriminatory manner. necessary, necessity keystone question lead. 61 regard inapposite case. Ricci, arbitrarily transferred membership, Commodity 998, seq., stayed confer immunity, complained conformity insulated attack. manifest, then, deference expertise activities represent conduct encompassed dispute. 62 amicus, confused questions. hand, actually legal allowance authorizes oversee concerned law, function envisioned Congress. wisdom becomes relevant 63 pervasive utility area, ousts 35. true pervasiveness factor Otter Tail 410 366, 373—375, 1022, 1027—1028, 359 respondents claim thereunder. amounts ousting acts us. 64 agree Appeals, respondents, deny conflicting standards. discussion Part III, subjected SEC.13 If requirements, find unable mandate sole aim whereas consider, addition, economic industry.14 Given confidence roles taken, throughout country proceedings scheme.15 outlined Beginning persistently minimal, 1959 deep members, ultimate long-term decree institution Significantly, subsequent commision fixing, indicated legislatively banning findings, reintroduction 66 sum, regulation, practice, illustrated one, conclusion. Interposition preclude effecutated Implied intended; nugatory 67 Affirmed. 68 DOUGLAS, concurring. 69 relies three factors—statutory (SEC), approval, affirmation role—in holding employed immune I join opinion, write separately emphasize single which, me, prime importance. 70 mere cannot justify immunizing challenges. safeguard strong free open properly equivalent mechanism functioning interest. actively aggressively exercising powers sure monitored manner intended. Cf. 387—389, 660—662, reviews involvement am affirm below. 72 STEWART, whom BRENNAN, joins, 73 joining add word. never held, today, inapplicable simply defendants. exists provisions.' Nat. 351, 1735, 915. 74 reserve immunize 'exchange justified charges aims Act.' 361, 1259, 389. work.' explains, ante, 663-667, aware well-established existed continuously 1792. Nevertheless, chose practice. Instead, empowered respecting thereby unmistakably that, ruled contrary, contains express establishing instance Smith, Bache Company, Petitioner Price Discrimination 1528, 13a. relief included injunction prohibiting available size. treble damages amounting $1.5 billion award attorneys' $10 million plus short, he complain membership; 3(a)(3), 78c(a)(3), definition 'member,' limited intangibles, commodities goods, litigation. comments commissions: 'As Sturgis, former president 1876 governor, chairman .: "The infamous crimes man fellow gross breach good faith wrongdoing nature, crime punish severely as, committee, permits. "Q. (referring commissions) you heinous commit? "A. absolute men.' rigidly enforced suspension five expulsion second. acknowledged H.R.Rep.No.1593, (1913). 1947, lot, H.R.Doc.No.95, 103 report. proposal continuation give-ups customers, termination 'rebative' reciprocal 'bona fide broker-dealers.' A255. increases restriction. continue old reductions return rate. expected competitive, extra planning adjustment needed. noted, additionally, impact significantly 109, 110. scale, high percentage costs, economies scale production. Neither 138—139. rejected Columbia Circuit. Broker-Dealers' 142 U.S.App.D.C. 384, 442 132, 404 828, 92 63, (1971). position. 38—39, One noted. defined term 'member' who, facilities thereon payment fee public.' 883. likelihood member, deleted exchange. 3(a)(3)(A), here affirmative agrees 'were adhere kind, liability arise.' 48. conclude rest Pan Airways 371 296, 305—310, 476, 482—485, 325 (1963), 350—352, 1734—1736, pointed immunity: intent Bank Merger lack Clayton Also, Comptroller General Currency. in, to, bar. note, Administrative Procedure 702 704, 78y.

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