RESPONDENT: Employers Insurance of Wausau
LOCATION: Austin's Auto Body Shop and mobile home
DOCKET NO.: 92-34
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 508 US 286 (1993)
ARGUED: Mar 01, 1993
DECIDED: Jun 01, 1993
Charles A. Bird - on behalf of the Petitioners
Robert A. Long, Jr. - on behalf of the United States, as amicus curiae, supporting the Respondents
Theodore B. Olson - on behalf of the Respondents
Facts of the case
Media for Musick, Peeler & Garrett v. Employers Insurance of Wausau
Audio Transcription for Oral Argument - March 01, 1993 in Musick, Peeler & Garrett v. Employers Insurance of Wausau
William H. Rehnquist:
We'll hear argument next in Number 92-34, Musick, Peeler & Garrett, et al. v. Employers Insurance of Wausau.
Mr. Bird, you may proceed.
Charles A. Bird:
Mr. Chief Justice, and may it please the Court:
This case concerns the implication of a cause of action for contribution in a Federal statute.
The statute in question is section 10(b) of the 1934 Securities Exchange Act.
It is a statute in which courts have previously implied a cause of action for people who suffer losses as a result of purchases or sales of securities where the... as a result of damage... or, pardon me, as a result of violations of section 10(b).
My theme today is simple.
The Court should apply its intent-based jurisprudence of implied rights, a standard which respondents concede they cannot meet when asked to apply a cause of action for a contribution in a statute in which a victim's civil claim has previously been implied.
Respondents and their amici assert that the Court should apply a different line of cases.
That is, a line of cases involving fleshing out the victim's remedy itself.
My burden today is to show that a contribution claim is a separate claim, and it should be treated as any other potential implied right of action in this Court's jurisprudence.
Implied contribution is to be treated like any other request for an implied action, first, because this Court has said so.
In the Northwest Airlines and Texas Industries cases, the unsuccessful petitioners made arguments which are indistinguishable from the arguments made by the respondents in this case.
The Court treated contribution there as an implied claim over those arguments.
In Texas Industries, the petitioner asserted that contribution was not at all a new cause of action, but only a supplement to the victim's express remedy in that statute for damages under section 4 of the Clayton Act.
The respondent... petitioner in that case also argued that contribution was a necessary corollary to judicial creation under the antitrust laws of joint and several liability among violators of that law, and amici in that case actually argued that contribution was somehow within the penumbra of the statute itself.
The court in that case said that in almost any statutory scheme, courts may have to interpret ambiguous or incomplete provisions, but the authority to construe a statute differs fundamentally from the authority to fashion new remedies.
The court also said that the judicial determination that defendants shall be jointly and severally liable does not suggest that courts have the power to order contribution among the defendants, for joint and several liability only assures that the victims whom Congress intended to protect shall have full recovery from some, if not all, of the perpetrators.
Were there any lingering doubt that somehow Texas Industries and Northwest Airlines differed from this Court's general jurisprudence of implied rights of action, I would suggest that was put to rest last year in footnote 6 of Franklin v. Gwinnett County Public Schools, where the Court cited all of those cases as a single line and said that it's intent-based jurisprudence shall apply to all such cases.
Implied contribution is to be treated like any other request for an implied claim, second, because contribution is a distinct action and--
Byron R. White:
I suppose that footnote sort of grandfathered the implied cause of action under 10(b).
Charles A. Bird:
--That footnote did not discuss the implied contribution under section 10(b).
Byron R. White:
No, not contribution, just cause of action.
Charles A. Bird:
The implied cause of action under 10(b) itself was grandfathered as far back as Bankers Life.
I think the Court has accepted the fact that lower courts have adopted that implied cause of action for victims and repeatedly in a number of cases the Court is fleshed out that cause of remedy, but as... the Court is never addressed the issue whether there shall be implies contribution.
Contribution is a separate action because it always involves a different plaintiff, and that different plaintiff is someone whose claim has not been recognized that different plaintiff is someone who is always a perpetrator of a violation of the statute, always a member of the class that Congress intended to regulate, never a member of the class that Congress intended to protect.
Second, contribution very often involves a different defendant.
Even if contribution is sought in the same action where the victims seek their compensation third party practice permits other parties, other defendants to be brought in by contribution actions, and often, as is the case here, contribution brings to Federal court a new suit.
Implying contribution truly extends Federal jurisprudence to embrace a dispute which Congress has not assigned the Federal courts to resolve, and that is a dispute for adjustment of damages among defendants as opposed to a suit for compensation by a victim.
Unless Congress tells the Federal courts that it wants them to embrace that dispute, to reach out--