Court Opinion

ID: 9884287
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:51:09.653648+00
Date Added: 2024-06-11T07:48:37.331308
License: Public Domain

CRIPPEN, Judge,
concurring specially.
Section 12(2) of the Security Act of 1933 expressly declares the seller’s liability to the buyer in a case where the seller employs untrue or incomplete statements to sell securities. 15 U.S.C.A. § 77Ɩ (West *2681981). Even more specifically, the section declares that the seller’s liability may be established by suit in any court of competent jurisdiction. Examining the language of these provisions, together with the later enactment by Congress of the United States Arbitration Act (9 U.S.C.A. § 1 et seq. [West 1980]), the United States Supreme Court decided that the “intention of Congress” in the Securities Act was better carried out by holding invalid an agreement for arbitration instead of judicial proceedings to determine section 12(2) liability. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1963). Appellant’s suggestion that this court disregard the holding in Wilko is unacceptable. There are reasons for this conclusion in addition to those noted in the majority opinion.
First, Wilko determined the intention of Congress in 1933. Subsequent abandonment of judicial views expressed in Wilko does not alter the intention of Congress in 1933. Congress itself has said nothing constituting an amendment of its 1933 enactment, even though Wilko was decided thirty-five years ago. It is by no means certain that Wilko will ever be overruled by the Supreme Court in the absence of legislative alteration of section 12(2).
In addition, section 12(2) of the Securities Act is unique, when compared with the provisions of the Exchange Act of 1934 reviewed in Shearson/American Express, Inc. v. McMahon, — U.S.-, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987). Section 10(b) of the Securities Exchange Act of 1934 describes unlawful acts, and it is silent on the question of remedies for those acts. 15 U.S.C.A. § 78j(b) (West 1981). In contrast, section 12(2) of the 1933 enactment is an express declaration of civil liability in judicial proceedings. The Wilko determination that arbitration was an inappropriate substitute for the remedy declared in the 1933 Act is wholly understandable. It is equally understandable that the Supreme Court in McMahon deliberately backed away from overruling Wilko. See McMahon, — U.S. at-, 107 S.Ct. at 2338 (It “must be understood” that Wilko found the buyer’s waiver of judicial forum unenforceable “because arbitration was judged inadequate to enforce the statutory rights created by § 12(2)”).