Document: 543 U.S. 50 KOONS BUICK PONTIAC GMC, INC.v.NIGH No. 03-377. Supreme Court of United States. Argued October 5, 2004. Decided November 30, As enacted in 1968, the Truth Lending Act's (TILA) civil-liability provision, 15 U. S. C. § 1640, authorized statutory damages for violations TILA prescriptions governing consumer loans as follows: "(a) [A]ny creditor who fails connection with any credit transaction to disclose person information required . is liable that an amount (1) twice finance charge transaction, except liability under this paragraph shall not be less than $100 nor greater $1,000." In 1974, Congress added a new 1640(a) allow recovery actual and provide separate class actions. simultaneously amended original provision limit it individual actions, moved from 1640(a)(1) 1640(a)(2)(A), retained $100/$1,000 minimum maximum recoveries. accounted statute's restructuring by changing phrase "under paragraph" subparagraph." A 1976 amendment redesignated 1640(a)(2)(A)'s 1640(a)(2)(A)(i), inserted clause (ii) setting actions relating leases, brackets on recovery. Following latter amendment, lower federal courts consistently held remained applicable all financing transactions, whether lease or loan. Finally, 1995, (iii) at end so statute now authorizes equal "(i) case action 25 per centum total monthly payments lease, subparagraph $1,000, open plan secured real property dwelling, $200 $2,000." Respondent Nigh attempted purchase used truck petitioner Koons Buick Pontiac GMC. Unable find lender complete financing, revised retail installment sales contract presented Nigh. After signing third contract, discovered second had contained improperly documented car alarm never requested, agreed accept, received. made no returned Buick. He then filed suit against alleging, among other things, violation seeking uncapped charge, $24,192.80, (i) 1640(a)(2)(A). The District were capped jury awarded full amount. affirming, Fourth Circuit 1995 only raised recoverable involving real-property-secured closed-end loans, also removed $1,000 cap recoveries personal property. Appeals its previous view applied both clauses 1640(a)(2)(A) was rendered defunct when struck "or" preceding after subparagraph" phrase. According court, inclusion $200/$2,000 shows can longer interpreted apply (A), but must solely (ii), render meaningless articulated (iii). court therefore allowed recover $24,192.80. Held: left unaltered limits prescribed start personal-property loans. Both conventional meaning "subparagraph" standard interpretive guides point same conclusion: applies (i). ordinarily adheres hierarchical scheme subdividing sections. Under scheme, word refer subdivision preceded capital letter "clause" Roman numeral. followed drafting TILA. For example, 1640(a)(2)(B), which covers states: "[T]he more lesser $500,000 1 net worth creditor. ." (Emphasis added.) Had meant repeal longstanding limitation thereby confining likely would have stated (ii): "liability clause." history resolves ambiguity Before set entire realm TILA-regulated transactions. Closed-end mortgages encompassed addition makes subject higher floor ceiling, contains measure damages. Clause (i)'s specification continues does removes governance extent prescribes brackets. There scant indication alter Cf. Church Scientology Cal. v. IRS, 484 9, 17-18. demonstrates that, adding (iii), sought increased occurs context loan It passing strange read closed-end, substantially available personal-property-secured open-end, text dictate result; suggests otherwise; there change well-established Pp. 60-64. 319 F. 3d 119, reversed remanded. GINSBURG, J., delivered opinion Court, REHNQUIST, STEVENS, O'CONNOR, KENNEDY, SOUTER, BREYER, JJ., joined. concurring opinion, joined, post, p. 65. 66. THOMAS, judgment, 67. SCALIA, dissenting 70. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR FOURTH CIRCUIT. Donald B. Ayer argued cause petitioner. With him briefs William K. Shirey II Arthur M. Schwartzstein. A. Hugo Blankingship III respondent. brief Allison Zieve Brian Wolfman.* JUSTICE GINSBURG Court. section Act (TILA Act), 1601 et seq., issue case. originally question bracketed loans: award. increasing "secured dwelling." 1640(a)(2)(A)(iii). lieu recoveries, substituted ceiling. 2 Less-than-meticulous created ambiguity. divided panel States We reverse determination hold purpose doubt: raise remove 3 * part Consumer Credit Protection Act, Pub. L. 90-321, 82 Stat. 146, amended, "assure meaningful disclosure terms will able compare readily various avoid uninformed use credit," 102, codified U.S.C. 1601(a). requires such things charges, annual percentage rates interest, borrowers' rights, see §§ 1631-1632, 1635, 1637-1639, civil do so, 1640. provided could $1,000.1 stated: 4 chapter disclosed "(1) 130, 157. 5 TILA's 1640(a), 93-495, 408(a), 88 1518. reworded order account statute, changed 6 comply requirement imposed sum — 7 damage sustained result failure; 8 "(2)(A) 9 further truth-in-lending protections leases. Leasing 1976, 90 257. into leases 25% lease. Again, 10 "(2)(A)(i) 94-240, 4(2), 260, (1976 ed.). 11 insertion See, e. g., Purtle Eldridge Auto Sales, Inc., 91 797, 800 (CA6 1996); Cowen Bank Tex., FSB, 70 937, 941 (CA7 1995); Mars Spartanburg Chrysler Plymouth, 713 2d 65, 67 (CA4 1983); Dryden Lou Budke's Arrow Finance Co., 661 1186, 1191, n. (CA8 1981) (per curiam); Williams Public Corp., 598 349, 358, 359, 17 (CA5 1979). 12 once more. gave rise dispute case, $2,000 ceiling Amendments 104-29, §6, 109 274. These estate formerly (i), earlier been limitation. Mayfield Vanguard Sav. & Loan Assn., 710 Supp. 143, 146 (ED Pa. 1989) (ordering "the award $1,000" each concerning loan). Section thus provides 13 Shortly passage amendments, Office Comptroller Currency issued official policy announcement describing changes. respect changes provisions, "[p]unitive transactions dwelling (closed-end only)." Administrator National Banks, OCC Bulletin 96-1, (Jan. 1996). 14 1997, Seventh Circuit, Strange Monogram Card Ga., 129 943, untouched observed prior "[c]ourts uniformly final clause, established maximum, applying (A)(i) (A)(ii)." Id., 947. reasoned, "was designed simply establish generous certain without general rule awards two parts 1640(a)(2)(A)." Ibid. illustrates, may involve charges doubled, are $100. There, double-the-finance-charge $54.27, entitling plaintiff minimum. 945, On February 4, 2000, respondent Bradley 1997 Chevrolet Blazer traded his old vehicle signed buyer's reflecting 121-122 2003). assignment owed consequently restructured deal require larger downpayment. 122. 25, falsely told trade-in sold, contract. Once again, however, unable willing lender. ultimately signed, protest, 16 later one reason why assignee due contract: That $965 Silencer 123. 3, urged 1640(a)(2)(A)(i). $24,192.80 (twice charge). 121; App. 01-2201 etc. (CA4), pp. 653-655, 670, 756-757, 764. 18 affirmed. 3d, 126-129. acknowledged previously (ii). 126; 2d, But majority "by striking `or' inserting `under subparagraph' phrase," "rendered Mars' interpretation defunct." 126. majority: "The (iii)." 127.2 19 Judge Gregory dissented. he stated, operates specific "carve-out" establishing 132. parties acknowledged, law Mars, before subparagraph. 130. found "no evidence intended override Circuit's long-standing application (2)(A)(i) (2)(A)(ii)." 131. If dissent "superfluous," because unchanged deletion." Moreover, added, limiting create inconsistency within statute: include modifier, not. Ibid.3 20 granted certiorari, 540 1148 (2004), resolve division between judgment Circuit. 21 Statutory construction "holistic endeavor." Assn. Tex. Timbers Inwood Forest Associates, Ltd., 365, 371 (1988); accord Nat. Ore. Independent Ins. Agents America, 508 439, 455 (1993); Smith States, 223, 233 (1993). "A seem ambiguous isolation often clarified remainder scheme—because terminology elsewhere clear, permissible meanings produces substantive effect compatible rest law." S., (citations omitted); McCarthy Bronson, 500 136, 139 (1991) (statutory language proper viewed isolation). 22 See Filson, Legislative Drafter's Desk Reference 222 (1992) (hereinafter Reference). This hierarchy forth manuals prepared legislative counsel's offices House Senate. manual provides: 23 "To practicable, should broken 24 "(A) subsections (starting (a)); "(B) paragraphs (1)); 26 "(C) subparagraphs (A)); 27 "(D) (i)) Counsel's Manual Drafting Style, HLC 104-1, (1995). Senate similarly 28 subdivided indented 29 SUBSECTION.— 30 PARAGRAPH.— 31 SUBPARAGRAPH.— 32 CLAUSE.—" Counsel, (1997).4 33 generally letter,5 numeral.6 plainly "to maximum" mortgages. Strange, F.3d, point, disagreement. flagged substantial change. At very least, minded might 34 (i).7 Supp., 146. property.8 $100/$1,000.9 35 17-18 (1987) ("All all, we think where common sense suggests, analogy Sir Conan Doyle's `dog didn't bark,' having ascribes differently described sponsor, nearly accepted manager bill."). By H. R. Rep. 104-193, 99 (1995) ("[T]his increases closed ."). cf. 75 (SCALIA, dissenting) (hypothesizing far focusing raising mortgage "focus[ed] intently damages" category loans). "[T]here canon using construing laws saying what they obviously mean." Roschen Ward, 279 337, 339 (1929) (Holmes, J.). loan.10 36 37 reasons reversed, remanded proceedings consistent opinion. 38 ordered. Notes: Briefs ofamici curiae urging reversal American Bankers Association al. Roy T. Englert, Jr., Alan E. Untereiner, Max Huffman; Michigan John J. Bursch; Automobile Dealers Paul Norman; Virginia Michael G. Charapp, Brad D. Weiss, Allen Jones, Jr. amici affirmance Commercial Law League America Manuel Newburger Barbara Barron; Advocates Richard Rubin Joanne Faulkner. determined, exceptions, payable directly indirectly whom extended, incident extension credit." 1605(a) adopts similar structural argument justify conclusion Seepost, 70-71. noted subparagraph," appears covering "indisputably (B)." F.3d 132 most logical statute," concluded, "is subparagraph, either (A) (B), (2)(A)(iii) creating carve-out real-estate transactions."Ibid. congressional manuals, postdating guides. See,e. ("Federal statutes always down successively (A)), [and] (i)). ."); Hirsch, Federal 3.8, (2d ed. ("Paragraphs tabulated lettered (`(A)', `(B)', etc.) Subparagraphs bearing small roman numerals (`(i)', `(ii)', `(iii)', `(iv)') Dickerson, Fundamentals Legal 8.25, 197 1986) ("For divisions (called `subparagraphs'), `(A),' `(B),' `(C),' When additional designated breakdown necessary, `(i),' `(ii),' `(iii),' etc."); Peacock, Notes (1961) (paragraphs "sub-paragraphs (C)," "clauses (iii)"). 1602(aa)(2)(A) ("under subparagraph"); 1602(aa)(2)(B) (A)"); 1605(f)(2)(A) ("except (B)"); 1615(c)(1)(B) ("pursuant 1637(c)(4)(D) ("in (B)"). 1637a(a)(6)(C) ("subparagraph" capital-letter subdivision). 1637(a)(6)(B)(ii) ("described (i)"); 1637a(a)(8)(B) 1640(i)(1)(B)(ii) (i)"). five writings has produced demonstrate hardly model careful drafter's art security interest taken borrower's principal borrower right rescission circumstances. 1635 dissent's reading, note, hinges assumed alteration Congress' design, assertedly effected bare "(iii)" transposition "or." 71-72, 1. mortgages, beyond debate. limitations read: "except reading lead anomalous liability, fixed dollar limit, open-end property, while financed exceeds $25,000, 1603. Double-the-finance-charge (e. home equity line credit), exceed mortgage. states prevalent lines mean balance considerably smaller first balance. Post, 74-75. even stands collect if acquisition figures compiled Reserve Board, 2004 average $77,526, CBA news release, Home Equity Lines Adjust Prime Rate Change, Nov. 10, 2004, http://www.cbanet.org/news/press% 20releases/home_equity/prime_rate_adjust.htm (as visited 15, Clerk Court's file), about extended mostly fully use, Canner, Durkin, Luckett, Recent Developments Lending, 84 Fed. Res. Bull. 241, 247 (Apr. 1998) (30% 75%-100% 1997). Assuming, does, 10% rate, easily surpass $7,000, Additionally, observation address anomaly, illustrated facts providing double-the-finance capping over $24,000 misconduct occurred mortgage, received BREYER joins, concurring. unambiguous plausible decision sufficient basis determining affirm Appeals. ordinary reader including three identified nothing implausible uses formula designating floor. Thus cannot escape command proclaiming produce absurd result. can, sense. perfectly clear did intend pre-existing being limited Thus, unquestionably decides correctly. demonstrated busy capable enacting scrivener's error law. recent years suggested look resolving textual ambiguities absurdities. wiser acknowledge appropriate consider true intent interpreting work product.1 Common reliable rote repetition canons construction.2 unfortunate wooden reliance those led unjust results time time.3 Fortunately, today us lucid reflects sound SeeWisconsin Intervenor Mortier, 501 597, 611, ("[C]ommon inquiry benefits reviewing rather ignoring it"); Trucking Assns., 310 534, 543-544 (1940) ("When aid words, available, certainly `rule law' forbids however words appear `superficial examination'" (footnote omitted)); Fisher, Cranch 386 (1805) (Marshall, J.) ("Where mind labours discover design legislature, seizes every thing derived"). execute our duty judges faithfully arrive "seek[ing] guidance source." Barak, Judicial Discretion 62 (Y. Kaufmann transl. 1989). Stevens, Shakespeare Canon Construction, 140 Rev. 1373, 1383 Barnhart Sigmon Coal 534 438 (2002); James, 478 597 (1986); Locke, 471 (1985). CHIEF us, respectable text, 1640(a)(2)(A)(ii), instruction issue: directs (A)(ii), fall (A). Were adopt analysis, holdings cases Lamie Trustee, 526, 533-535 Connecticut Germain, 503 249, 253-254 (1992), Ron Pair Enterprises, 489 235, 241-242 (1989), applicable, absent showing little properly chooses holding statute. counter-argument straightforwardly light different (A)(iii). I agree proceed premise altogether clear. means examination resources, predecessor statutes, necessary understanding intent. approach which, rely sources. instant consults extratextual sources and, my view, looking these materials confirms usual "subparagraph." observations, join judgment. reversed. write separately, believe unnecessary inferences silence perceived posed alternative answer ante, 63, 10. Instead, it, Courts given itself make tacked addressing otherwise covered materially altering provisions here. resort anything else unwarranted. 532-533 (2004). ambiguous, 53, STEVENS contends, 65 (concurring opinion), face susceptible several interpretations. Congress, points out, "`subparagraph'" TILA, albeit perfect consistency, third-level introduced letter. 60-62, 4. usage toward here refers whole tension reading. correctly pointed out SCALIA notes, 72 (dissenting $100-$1,000 direct conflict $200-$2,000 126-127 Still clues away Appeals' possible, exception since comes conflicting indicators show whatever practices relied upon 60-61, best drafting. Prior subdivisions recounts, 55. doubt version well (A)(ii). above, section's virtue placement indicated clarity borne stood amendment. F.2d 67, 1640(a)(2)(A)(i) placed 6, Apart change, neither deleted clauses. wrought creation transactions—closed-end dwelling—that cap. structuring evinced history, text's courts' remains dissenting. views involves that. adopted 66-67 67-68 (opinion judgment), disagree believes follows. ultimate "subparagraph," scope term. brackets? answering question, give dispositive weight structure indicates fact section, denominated (here analysis proceeds steps. First, presumes determines exception. 62. context, reference indeterminate. Since freestanding limitation, quite possible consumer-lease Using way nonsensical, specified actually synonymous clause," ibid., result, term inquiry. simplified form, reads: ., Clauses separated commas, reasonable conclude exception—which "(ii)" comma precedes "or (iii)"—is fact, admits "in (ii)." (emphasis added); (STEVENS, concurring) (referring (ii)" added)). Yet necessarily assumes somehow outside (ii)—someplace would. effectively simultaneously, cited reveal how unnatural unanchored be. 223 ("If unit kind, contain kind unless subdivisions" added)); unit, 1st subdivision" 10-11 (1997) (explaining "using cut-in flush language," is, supposed (a)(1) (a)(2) (2) (a) (a)(1)). step, notes insufficient current version. THOMAS "at (A)" "indicat[e] (A)." Ante, 69. inference, eliminated still there, just conceive sublist attached whole. purportedly universal item three-item list. step addresses implicated concludes underlying charge) "continues apply" governed newly follow merely because, extending caused To remedy this, (see 62-63, 9) violence entirely.1 feature solve problem yet another. My avoids altogether. fourth returns finds "scant (i)" compares "`Sir "dog bark."'" 63 (quoting (1987)). indication" moving list middle, making impossible, doing Needless say, sponsors managers failed say.2 criticized lends ventriloquism. Congressional Record committee reports come Congress's mouth spoken written others (individual Members aides, enterprising lobbyists). Canine Silence invokes introduces reverse—and least equally dangerous—phenomenon, refuse own lips unison. Morales Trans World Airlines, 504 374, 385, ("[L]egislative need confirm details interpret according natural meaning"). fifth asserts "anomalous" "uncapped [$1,000] limit" secures loan, "passing strange" "substantially lower" lack not, course, limitless. 1-year limitations, 1640(e), naturally sought. More importantly, expected amounts (and charges) much (like one) $25,000. 1603(3). Where includes (or loans), significantly (HELOCs) 1994, 64% home-owning households 7% HELOCs outstanding balances. Survey Research Center, Univ. Michigan, Loans (Oct. (Table 1) Survey). $66,884; $16,199; HELOC $18,459. Assuming rate (which typical Canner Lending: Evidence Surveys, 80 571, 582 (1994)), year $2,000—which, times disproportion explicitly addition, large balances comparatively rare. 2001, roughly 94% them median $69,227. Census Bureau, Housing States: 150, 152 2002) 3-15) Survey).4 Approximately 2% $100,000 (compared approximately 32% mortgages). ibid. Because many common, typically larger, ones, focus difference (principally leases) distinctive special differs demands explanation tied charges. acknowledges, "plausible decision." fight vindicate suspicion made—but neglected explain clearly—a decision. year: "If something intended, amend conform province rescue errors, preferred result." 542 (2004) (internal quotation marks omitted). associated footnote pretend "Congress `(iii)' recovery." so—not, principles supposedly form Seesupra, 71. adhere "pretend" "(i)" "(ii)." Otherwise, recited clause. thatwere said characteristically unhelpful. McCollum said: bill raises 141 Cong. Rec. 26576 (1995); id., 26898 (remarks Sen. Mack) (same). Two weeks later, "clarif[ied]" remarks specifying amendments "apply estate." 27703 (statement Reps. Gonzalez). Taken literally, statements "individual actions" "loans estate" Neither option medians were, means: $49,000 $11,000 $15,000 HELOCs. 1994 survey report range Bureau's began reporting detailed data HELOCs—in presumably comparable dramatically changed. (The 2001 $17,517 8%. 152, 154 3-15).)

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