DOCKET NO.: 77-753
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Seventh Circuit
CITATION: 439 US 551 (1979)
ARGUED: Oct 31, 1978
DECIDED: Jan 16, 1979
Jacob H. Stillman - for the Securities and Exchange Commission, as amicus curiae, by special leave of Court
Lawrence Walner - for respondent in both cases
Peter J. Barack - for respondent in both cases
Sherman Carmell - for petitioner in No. 77-754
Sidney Dickstein - for petitioner in No. 77-753
Facts of the case
Media for International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. DanielAudio Transcription for Oral Argument - October 31, 1978 in International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Daniel
Audio Transcription for Opinion Announcement - January 16, 1979 in International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Daniel
Warren E. Burger:
The judgment and opinion of the Court in No. 753, International Brotherhood of Teamsters against Daniel and the consolidated case will be announced by Mr. Justice Powell.
Lewis F. Powell, Jr.:
This case comes to us from the Court of Appeals for the Seventh Circuit.
It presents the question as to the application of the Federal Securities Acts to noncontributory compulsory pension plans.
Under the plan at issue, contributions to a pension fund were made by the employer based on the number of weeks worked by employees.
Upon accepting employment, an employee was automatically covered by the plan.
As it was noncontributory, he paid no money into the fund.
The employee was required however to have 20 years of continuous service to be entitled to a pension.
Respondent in this case was employed for more than 20 years but because his service was entirely continuous, he did not qualify for a pension.
He thereupon brought this suit against the international union, the local to which he belonged and the pension fund.
He alleged that petitioners had misrepresented and failed to disclose material facts about the plan.
He charged common law fraud, violation of the National Labor Relations Act and violation of the Federal Securities Acts.
We are concerned in this case only with the claim under the Securities Acts.
The application of these Acts turns upon whether the employee's interest in the pension plan is a security as that term is defined.
Respondent argued successfully before the Court of Appeals that his interest in the plan was an investment contract within the definition of the term security. We reverse the judgment of the Court of Appeals.
A noncontributory compulsory pension plan is not a security within the meaning of the Federal Securities Acts.
We base our decision on the plain language of these statutes on the standards applied in our prior cases and on the actions over the years by the Congress, by the SEC with respect to pension plans of the type involved in this case.
We express no opinion as to respondent's entitlement to proceed on the other counts set forth in his complaint.
The Chief Justice has filed a concurring opinion.
And Mr. Justice Stevens took no part in the consideration or decision of this case.
Warren E. Burger:
Thank you Mr. Justice Powell.