Radzanower v. Touche Ross & Co.
48 L. Ed. 2d 540, 1976 U.S. LEXIS 103, 426 U.S. 148 (1976)
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Rule of Law:
A specific and narrowly drawn statute is not implicitly repealed by a later-enacted, more general statute unless there is a clear congressional intent to do so. Therefore, the specific venue provision of the National Bank Act prevails over the general venue provision of the Securities Exchange Act.
Facts:
- First National Bank of Boston (First National) is a national banking association with its principal office and place of establishment in Boston, Massachusetts.
- Hyman Radzanower alleged that First National had knowledge of adverse financial information concerning one of its customers, TelePrompter Corporation.
- Radzanower further alleged that First National also knew about securities law violations committed by TelePrompter.
- Radzanower claimed that First National violated federal securities laws by failing to disclose this critical information to the Securities and Exchange Commission and the investing public.
- Based on these alleged violations, Radzanower sought to bring a class action lawsuit against First National in the Southern District of New York.
Procedural Posture:
- Hyman Radzanower filed a class action lawsuit against First National Bank of Boston in the U.S. District Court for the Southern District of New York.
- The bank filed a motion to dismiss the complaint, asserting that venue was improper under the National Bank Act (12 U.S.C. § 94).
- The District Court (a court of first instance) granted the bank's motion to dismiss.
- Radzanower, as appellant, appealed the dismissal to the U.S. Court of Appeals for the Second Circuit.
- The Court of Appeals (an intermediate appellate court) affirmed the district court’s judgment without a written opinion.
- Radzanower then petitioned the U.S. Supreme Court for a writ of certiorari, which the Court granted.
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Issue:
Does the broad venue provision of the Securities Exchange Act of 1934 supersede the narrow, specific venue provision of the National Bank Act when a national bank is sued for securities law violations?
Opinions:
Majority - Mr. Justice Stewart
No. The narrow venue provision of the National Bank Act is not superseded by the broader provision in the Securities Exchange Act. It is a fundamental principle of statutory construction that a specific statute will not be controlled or nullified by a general one absent a clear intention otherwise. The National Bank Act's venue provision is specific to national banks, while the Securities Exchange Act's provision is general, applying to all potential defendants. Repeals by implication are disfavored and only occur if two acts are in irreconcilable conflict or the later act is clearly intended to substitute the earlier one. Here, the statutes can coexist; the Securities Exchange Act can function effectively even if the small fraction of suits against national banks must be brought where they are established. There is no 'clear and manifest' legislative intent in the Securities Exchange Act to repeal the long-standing venue rule for national banks.
Dissenting - Mr. Justice Stevens
Yes. The venue provision of the Securities Exchange Act should apply to national banks. Both statutes are special venue provisions, one for a type of litigant (banks) and one for a type of litigation (securities), so the 'specific over general' rule is not a helpful guide. The historical justification for the National Bank Act's venue provision—to protect fledgling Civil War-era banks from the hardship of travel—is anachronistic and irrelevant in the modern era. The policy behind the Securities Exchange Act's broad venue provision is to facilitate enforcement and protect investors, a far more significant contemporary legislative goal. It is unrealistic to assume Congress intended to subject banks to the same liability as other defendants but grant them a special, archaic procedural protection for venue.
Analysis:
This decision solidifies the strong judicial presumption against implied repeals of statutes, emphasizing the canon that a specific statute governs over a general one. By giving precedence to the older, more specific National Bank Act, the Court created a significant procedural advantage for national banks in securities litigation. This ruling can lead to fragmented lawsuits, requiring plaintiffs to sue a national bank in its home district while suing other defendants involved in the same transaction elsewhere, potentially increasing litigation costs and complexity. It firmly places the onus on Congress to explicitly state its intent when it wishes for new, broad remedial legislation to override older, specific statutory provisions.
