Radzanower v. Touche Ross Co

• Decision Date: 07 June 1976
• Docket Number: No. 75-268,75-268
• Parties: Hyman RADZANOWER, Petitioner, v. TOUCHE ROSS & CO. et al
• Court: U.S. Supreme Court

426 U.S. 148

96 S.Ct. 1989

48 L.Ed.2d 540

Hyman RADZANOWER, Petitioner,

v TOUCHE ROSS & CO. et al.

No. 75-268.

Argued March 30, 1976.

Decided June 7, 1976.

Syllabus

Venue in a suit against a national banking association charged with violating the Securities Exchange Act of 1934 Held to be governed by the venue provision of the National Bank Act, 12 U.S.C. § 94, which provides that an action against a national banking association may be had in any federal district court within the district in which such association may be established, rather than by § 27 of the Securities Exchange Act, which provides that any action to enforce any liability or duty under that Act may be brought in any district where the violation occurred or in the district wherein the defendant is found or transacts business. Pp. 153-154.

(a) Under a basic principle of statutory construction, "(w)here there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment." Morton v. Mancari, 417 U.S. 535, 550-551, 94 S.Ct. 2474, 2482-83, 41 L.Ed.2d 290, 300-01. Pp. 153-154.

(b) A Pro tanto repeal of § 94 by implication is not indicated on the ground that the two Acts are irreconcilable, since the underlying purpose of the Securities Exchange Act (enacted 70 years after the National Bank Act) was, not to regulate the activities of national banks as such, but to promote fair dealing on the securities markets; and the broad § 27 venue provision was intended to further that goal by enabling enforcement suits to be brought wherever a defendant could be found, whereas the narrow § 94 venue provision was intended for the convenience of banking institutions, and to prevent interruption of their business that might result from their books being sent great distances. In the very few instances where actions for securities violations are brought against banking institutions the requirement that suit be brought where the defendant is established is no insurmountable burden. Pp. 154-157.

(c) Nor is repeal of § 94 to be implied on the ground the later securities statute covers the whole subject of the earlier bank statute. The subjects covered by the two statutes are wholly different, and nothing in the legislative history of the securities statute manifests an intention to Pro tanto repeal § 94. Pp. 157-158.

516 F.2d 896, 2 Cir., affirmed.

Ira Jay Sands, New York City, for petitioner.

Samuel E. Gates, New York City, for respondents.

Mr. Justice STEWART, delivered the opinion of the Court.

This case requires us to determine which venue provision controls in the event a national banking association is sued in a federal court for allegedly violating the Securities Exchange Act of 1934: the broad venue provision of the Securities Exchange Act, which allows suits under that Act to be brought in any district where the defendant may be found, or the narrow venue provision of the National Bank Act, which allows national banking associations to be sued only in the district where they are established.

The petitioner, Hyman Radzanower, instituted a class action in the District Court for the Southern District of New York alleging, Inter alia, that the respondent, First National Bank of Boston, a national banking association with its principal office in Boston, Mass., had violated the federal securities laws by failing to disclose to the Securities and Exchange Commission and the investing public its knowledge of certain adverse financial information about one of its customers, the TelePrompter Corporation, and of securities laws violations by that company. The complaint alleged that venue was proper under § 27 of the Securities Exchange Act of 1934, 48 Stat. 902, 15 U.S.C. § 78aa, which provides that "(a)ny suit or action to enforce any liability or duty created (by or under the Securities Exchange Act) . . . may be brought in any such district (wherein any act or transaction constituting the violation occurred) or in the district wherein the defendant is found or is an inhabitant or transacts business. . . ." The bank moved to dismiss the complaint as to it, asserting that venue as to it lay only under the venue provision of the National Bank Act, Rev.Stat. § 5198 (1878), 12 U.S.C. § 94. That section provides that "(a)ctions and proceedings against any (national banking) association under this chapter may be had in any district or Territorial court of the United States held within the district in which such association may be established. . . ." ¹ Following the settled law of the Second Circuit, the District Court granted the bank's motion to dismiss. It held that "(a)bsent waiver or consent, a national bank may be sued only in the district in which it is established. 12 U.S.C. Section 94." The court noted that the bank was established in Boston "because its charter specifies Boston as its principal place of business," ² and it rejected the petitioner's claim that the bank had waived the provisions of § 94.³ The Court of Appeals affirmed without opinion.⁴ Because of differing views in the Circuits as to the statutory venue question presented, ⁵ we granted the petition for certiorari. 423 U.S. 911, 96 S.Ct. 213, 46 L.Ed.2d 139.

Section 94 provides that suits against a national banking association "may be had" in the federal district court for the district where such association is established. The Court has held that this grant of venue is mandatory and exclusive: "The phrase 'suits . . . may be had' was, in every respect, appropriate language for the purpose of specifying the precise courts in which Congress consented to have national banks subject to suit and we believe Congress intended that in those courts alone could a national bank be sued against its will." Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 560, 83 S.Ct. 520, 523, 9 L.Ed.2d 523, 527. Accord, Michigan Nat. Bank v. Robertson, 372 U.S. 591, 83 S.Ct. 914, 9 L.Ed.2d 961; National Bank v. Associates of Obstetrics,⁶ 425 U.S. 460, 96 S.Ct. 1632, 48 L.Ed.2d 92. The venue provision of the Securities Exchange Act, by contrast, allows suits under that Act to be brought anywhere that the Act is violated or a defendant does business or can otherwise be found. It is the petitioner's contention that when a national bank is named as a defendant in a suit brought under the Securities Exchange Act, it loses the protection of the venue provisions of § 94 and may be sued in any federal judicial district where that Act was violated or where it does business or can be found. For the reasons that follow, we cannot accept that contention.

It is a basic principle of statutory construction that a statute dealing with a narrow, precise, and specific subject is not submerged by a later enacted statute covering a more generalized spectrum. "Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment." Morton v. Mancari, 417 U.S. 535, 550-551, 94 S.Ct. 2474, 2482, 41 L.Ed.2d 290, 301.⁷ "The reason and philosophy of the rule is, that when the mind of the legislator has been turned to the details of a subject, and he has acted upon it, a subsequent statute in general terms, or treating the subject in a general manner, and not expressly contradicting the original act, shall not be considered as intended to affect the more particular or positive previous provisions, unless it is absolutely necessary to give the latter act such a construction, in order that its words shall have any meaning at all." T. Sedgwick, The Interpretation and Construction of Statutory and Constitutional Law 98 (2d ed. 1874).⁸

When Congress enacted the narrow venue provisions of the National Bank Act, it was focusing on the particularized problems of national banks that might be sued in the state or federal courts. When, 70 years later Congress enacted the Securities Exchange Act, its focus was on the objective of promoting fair dealing in the securities markets, and it enacted a general venue provision applicable to the broad universe of potential defendants subject to the prohibitions of that Act. Thus, unless a "clear intention otherwise" can be discerned, the principle of statutory construction discussed above counsels that the specific venue provisions of § 94 are applicable to the respondent bank in this case. Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786.

The issue thus boils down to whether a "clear intention otherwise" can be discovered whether, in short, it can be fairly concluded that the venue provision of the Securities Exchange Act operated as a Pro tanto repeal of § 94. "It is, of course, a cardinal principle of statutory construction that repeals by implication are not favored." United States v. United Continental Tuna Corp., 425 U.S. 164, 168, 96 S.Ct. 1319, 1323, 47 L.Ed.2d 653, 658.⁹ There are, however,

"two well-settled categories of repeals by implication (1) where provisions in the two acts are in irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the earlier one; and (2) if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate similarly as a repeal of the earlier act. But, in either case, the intention of the legislature to repeal must be clear and manifest. . . ." Posadas v. National City Bank, 296 U.S. 497, 503, 56 S.Ct. 349, 352, 80 L.Ed. 351, 355.

It is evident that the "two acts" in this case fall into neither of those categories.

The statutory provisions at issue here cannot be said to be in "irreconcilable conflict" in the sense that there is a positive repugnancy between them or that they cannot mutually coexist. It is not enough to show that the two statutes produce differing results when applied to the same factual situation, for that no more than states the problem. Rather...