Court Opinion

ID: 6915261
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:38:48.790505+00
Date Added: 2024-06-11T16:06:38.352648
License: Public Domain

LUMBARD, Circuit Judge
(concurring and dissenting).
While I concur in the result, I must dissent from so much of Judge-WATERMAN’S opinion as expresses a. “doubt as to the power of the Commisl sion to promulgate Rule X-16B-3 inasmuch as the Rule’s broad language may-permit acts by insiders sought to be prevented by the Securities Exchange Act.”' I agree with what Judge Dawson has-written at 143 F.Supp. 472-473.
Obviously the Securities and Exchange-Commission concluded in 1952 that there-was little, if any, danger that such ácts*697by insiders would result from the Rule. Nor is there anything before us by way of fact or argument to indicate that any ¡such danger has actually materialized or that subsequent events have made it more likely that it might materialize, although we are advised that such plans have been adopted by hundreds of corporations as a matter of sound business policy for the benefit of all their stockholders.
In these circumstances it seems hardly fitting for judges relatively untutored in such matters to substitute their judg'ment for the expert determination of the Securities and Exchange Commission. Unless and until there is a clear showing that the Commission has opened a door which Congress meant to keep shut, I would leave it to the Commission and "the Congress to administer and legislate thereon respectively. On the record before us these are matters for executive and legislative action rather than by judicial interference.
Furthermore, I would suppose that at the very least we are bound to give the benefit of any doubt to the expert judgment of the Commission on matters which the Congress has confided to the Commission’s regulation. Drafting and .supervising the operation of such a rule ■obviously requires the Commission to weigh many factors, and this involves the kind of assessment which is difficult ■enough for experts. We should be guided by these principles, which have been expressed by the Supreme Court many times. See, e. g., Board of Trade of Kansas City v. United States, 1942, 314 U.S. 534, 548, 62 S.Ct. 366, 86 L.Ed. 432; National Broadcasting Co. v. United States, 1943, 319 U.S. 190, 224, 63 S.Ct. 997, 87 L.Ed. 1344; and Securities and Exchange Commission v. Central Illinois Securities Corp., 1949, 338 U.S. 96, 127, 69 S.Ct. 1377, 93 L.Ed. 1836. “[B]y virtue of its delegation of power to promulgate legislative rules Congress has shown its intent that the determination of the content of the rules should be made by the agency and not by the courts.” Davis, Administrative Law, 901 (1951).
In my opinion there is no basis in this record for an expression of any doubt as to the validity of Rule X-16B-3.
As these considerations have not prevailed, I have urged my colleagues to invite the Commission to express its views. I regret to report that they have rejected this suggestion.