Term: 2006
Docket: 05-1157
Credit Suisse Securities (Usa) Llc, Fka Credit Suisse First Boston Llc, Et Al. v. Glen Billing Et Al.
- Pro
05-1157 CREDIT SUISSE FIRST BOSTON V. BILLING DECISION BELOW:426 F3d 130 CHIEF JUSTICE ROBERTS TOOK NO PART JUSTICE KENNEDY TOOK NO PART HAVING BEEN ADVISED BY JUSTICE KENNEDY THAT HE NOW REALIZES THAT HE SHOULD HAVE RECUSED HIMSELF FROM PARTICIPATION IN THIS CASE, AND DOES NOW RECUSE HIMSELF, THE COURT VACATES ITS ORDER OF THURSDAY, DECEMBER 7, 2006. THE COURT HAS RECONSIDERED THE PETITION FOR CERTIORARI, AND THE PETITION IS GRANTED. THE CHIEF JUSTICE AND JUSTICE KENNEDY HAVE NOT PARTICIPATED IN THE VOTE TO WITHDRAW THE ORDER OF DECEMBER 7, 2006, OR IN THE INSTANT RECONSIDERATION OF THE PETITION FOR CERTIORARI. CERT. GRANTED 12/7/2006 QUESTIONS PRESENTED: Plaintiffs accuse defendants, 16 of the country’s largest underwriters and institutional investors, of a vast antitrust conspiracy to manipulate the aftermarket prices of some 900 technology stocks sold in initial public offerings. The Securities and Exchange Commission, relying on this Court’s decisions in United States v. National Ass ‘n of Securities Dealers, 422 U.S. 694 (1975), and Gordon v. New York Stock Exchange, 422 U.S. 659 (1975), informed the courts below that application of the antitrust laws here would conflict with and seriously disrupt its regulation of the securities offering process under the Securities Act of 1933 and Securities Exchange Act of 1934. The district court agreed with the SEC that implied antitrust immunity is required and dismissed the complaints. The court of appeals reversed, ruling that immunity is unavailable because Congress did not specifically consider and decide to immunize one practice challenged in the complaints— tie-in agreements allegedly requiring recipients of stock in an IPO to engage in other transactions. The question presented is: Whether, in a private damages action under the antitrust laws challenging conduct that occurs in a highly regulated securities offering, the standard for implying antitrust immunity is the potential for conflict with the securities laws or, as the Second Circuit held, a specific expression of congressional intent to immunize such conduct and a showing that the SEC has power to compel the specific practices at issue. LOWER COURT CASE NUMBER: 03-9284, 03-9288
In the 2006 case of Credit Suisse Securities (USA) LLC, FKA Credit Suisse First Boston LLC, et al. v. Glen Billing et al., the U.S. Supreme Court ruled in favor of Credit Suisse and other investment banks who were accused by investors of conspiring to manipulate prices during initial public offerings (IPOs). The plaintiffs alleged that these manipulative practices violated antitrust laws. However, the court held that such activities were regulated by securities law and thus immune from antitrust lawsuits under a doctrine known as "implied repeal." This means when two federal statutes are in conflict with each other, one may be deemed to implicitly override or repeal the other if it is more specific or recent legislation. In this case, Justice Breyer delivered an opinion for a unanimous court stating that there was clear compatibility issues between applying both securities and antitrust laws on IPOs' conduct; hence they decided to apply only security laws which provide more specialized study and regulatory framework for such cases.
In the dissenting opinion for Credit Suisse Securities (USA) LLC, FKA Credit Suisse First Boston LLC, et al. v. Glen Billing et al., Justice Thomas argued that antitrust laws should apply to investment banks involved in initial public offerings (IPOs). He disagreed with the majority's view that securities law implicitly precludes application of antitrust laws to IPO practices under scrutiny in this case. According to him, there was no clear evidence of a "clear repugnancy" between securities and antitrust regulations as required by precedent for such an exemption from anti-competition rules. Furthermore, he pointed out that both sets of laws aim at promoting market competition and investor protection but through different means; hence they can coexist without conflict or contradiction.
