The question
Whether Section 47(b) of the Investment Company Act impliedly empowers private parties to sue for rescission of any contract that allegedly violates the Act.
FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd.
What the Court decided
The Court held that Section 47(b) of the Investment Company Act does not impliedly empower private parties to sue for rescission of contracts that allegedly violate the Act. Congress, not the Judiciary, decides who may enforce federal law, and when Congress creates a private right of action it usually does so expressly. The ICA designates the SEC as its primary enforcer and expressly permits private enforcement of only two of its provisions, so Section 47(b) does not supply an implied one.
How the justices split
6-3The Court's opinion
Barrett, joined by Roberts, Thomas, Alito, Gorsuch, Kavanaugh
Congress decides who may enforce federal law and usually creates private rights of action expressly. To imply a private right, a statute must use rights-creating language aimed at protecting a particular class of persons, and language focused on the person regulated rather than the individuals protected does not suffice. An express remedial scheme elsewhere in a statute can foreclose an implied private cause of action. The ICA names the SEC as primary enforcer and expressly permits private enforcement of only two provisions, so Section 47(b) does not impliedly authorize private suits for rescission.
Dissenting
Kagan, writing alone
Kagan filed a dissenting opinion disagreeing with the majority's conclusion that Section 47(b) provides no implied private right of action to seek rescission of contracts that violate the Act.
Dissenting
Jackson, joined by Sotomayor, Kagan
Jackson filed a dissenting opinion, joined in full by Sotomayor and joined by Kagan as to Parts I and II, arguing that Section 47(b) supports a private right of action for rescission of contracts that violate the Act.
How we know · 5 sourced claims
Section 47(b) of the Investment Company Act does not impliedly empower private parties to sue for rescission of contracts that allegedly violate the Act.
Source: syllabus, Held
The ICA designates the Securities and Exchange Commission as its primary enforcer and expressly permits shareholders and issuers of securities to enforce two of its provisions.
Source: syllabus, Held
To create a private right, a statute must use rights-creating language aimed at protecting a particular class of persons, and language focused on the person regulated rather than the individuals protected does not suffice.
Source: syllabus, Held
Barrett delivered the opinion of the Court, joined by Roberts, Thomas, Alito, Gorsuch, and Kavanaugh.
Source: syllabus, lineup
Jackson filed a dissenting opinion joined by Sotomayor and joined by Kagan as to Parts I and II, and Kagan also filed a separate dissenting opinion.
Source: syllabus, lineup