The role of congressional intent in determining the existence of implied private rights of action

Notre Dame Law Review

Volumn 71, Issue 5, 1996, Pages 861-911

  Stabile, Susan J ^a  

^a ST JOHN'S UNIVERSITY   (United States)

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EID: 26044458899     PISSN: 07453515     EISSN: None     Source Type: Journal    
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References (318)

1. See, e.g., Endangered Species Act, 16 U.S.C. § 1540(g) (1994); Surface Mining Control and Reclamation Act, 30 U.S.C. § 1270 (1994); Federal Water Pollution Control Act, 33 U.S.C. § 1365(a) (1994).
2. See, e.g., National Labor Relations Act, 29 U.S.C. § 162 (1994); Submarine Cable Act, 47 U.S.C. §§ 21-33 (1988).
3. See, e.g., Federal Power Act of 1990, 16 U.S.C. §§ 791a-823b (1994); Interstate Commerce Act, 49 U.S.C. §§ 301-308 (1988 & Supp. V 1993).
4. Courts have addressed the issue of whether to imply a private right of action under a variety of statutes. See Securities Investor Protection Corp. v. Barbour, 421 U.S. 412 (1975) (Securities Investor Protection Act); National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453 (1974) (Rail Passenger Service Act of 1970); Calhoon v. Harvey, 379 U.S. 134 (1964) (Labor-Management Reporting and Disclosure Act of 1959); Local Div. No. 714, Amalgamated Transit Union v. Greater Portland Transit Dist., 589 F.2d 1 (1st Cir. 1978) (Urban Mass Transportation Act of 1964), overruled by Local Div. 589, Amalgamated Transit Union v. Commonwealth of Mass., 666 F.2d 618 (1st Cir. 1981); Bratton v. Shiffrin, 585 F.2d 223 (7th Cir. 1978) (Federal Aviation Act), vacated, 443 U.S. 903 (1979); Davis v. Southeastern Community College, 574 F.2d 1158 (4th Cir. 1978) (Rehabilitation Act of 1973), rev'd, 442 U.S. 397 (1979); Nedd v. United Mine Workers, 556 F.2d 190 (3d Cir. 1977) (Labor Management Relations Act), cert. denied, 434 U.S. 1013 (1978). Courts have also addressed the issue of implied causes of action under numerous sections of the Securities Exchange Act of 1934 (Exchange Act); see, e.g., Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) (holding no implied cause of action for damages under § 17(a) of the Exchange Act); Piper v. Chris-Craft Indus., 430 U.S. 1 (1977) (holding § 14(e) of the Exchange Act does not allow a tender offeror to bring suit); J.I. Case Co. v. Borak, 377 U.S. 426 (1964) (holding that a private cause of action is available under § 14(a) of the Exchange Act); Howing Co. v. Nationwide Corp., 826 F.2d 1470 (6th Cir. 1987) (holding that there is an implied cause of action for damages under § 13(e) of the Exchange Act), cert. denied, 486 U.S. 1059 (1988); Scientex Corp. v. Kay, 689 F.2d 879 (9th Cir. 1982) (holding no implied right of action for injunction under § 16(a) of the Exchange Act).
5. See infra text accompanying notes 40-57.
6. 113 S. Ct. 2063 (1993).
7. 29 U.S.C. §§ 1001-1461 (1994).
8. Mertens, 113 S. Ct. at 2074 n.2 (White, J., dissenting); see ERISA § 514(a), 29 U.S.C. § 1144(a) (1994) (ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.").
9. Mertens, 113 S. Ct. at 2074 n.2 (White, J., dissenting).
10. 114 S. Ct. 1439 (1994).
11. 15 U.S.C. § 78j(b) (1994). The parties in Central Bank did not even question the existence of an aiding and abetting cause of action under § 10(b). The issue in the district court and the Tenth Circuit had to do with the elements of the aiding and abetting cause of action. See First Interstate Bank v. Pring, 969 F.2d 891 (10th Cir. 1992), rev'd sub nom. Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994). The Supreme Court determined sua sponte to address the broader question of the existence of the implied cause of action itself, which it had twice before declined to address. See Herman & MacLean v. Huddleston, 459 U.S. 375, 379 n.5 (1983); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 191-92 n.7 (1976).
12. This Article adds to a tremendous volume of literature on implied causes of action. Most frequently, commentators have addressed implied causes of action within the context of a specific statutory area, rather than addressing the issue globally. See, e.g., Daniel M. Crane, Congressional Intent or Good Intentions: The Inference of Private Rights of Action under the Indian Trade and Intercourse Act, 63 B.U. L. REV. 853 (1983);
13. Joseph A. Grundfest, Disimplying Private Rights of Action Under the Federal Securities Laws: The Commission's Authority, 107 HARV. L. REV. 963 (1994).
14. For examples of those who have addressed implication of private causes of action more generically, see Gregory R. Mowe, Federal Statutes and Implied Private Actions, 55 OR. L. REV. 3 (1976);
15. John E. Noyes, Implied Rights of Action and the Use and Misuse of Precedent, 56 U. CIN. L. REV. 145 (1987);
16. Stephen E. Ronfeldt, Implying Rights of Action for Minorities and the Poor Through Presumptions of Legislative Intent, 34 HASTINGS L.J. 969 (1983).
17. Additionally, this Article does not explicitly address the question of what statutory rights may be protected through an action brought under 42 U.S.C. § 1983, which grants a cause of action in favor of any person deprived, under color of law, of any rights secured by the Constitution "and laws" of the United States. 42 U.S.C. § 1983 (1988). As a result of the "and laws" language, a violation of certain federal statutes will give rise to a cause of action under § 1983, without regard to whether the statute violated makes provision for a cause of action. See Maine v. Thiboutot, 448 U.S. 1 (1980). Although the Supreme Court views the question of whether a right created by a particular statute can be vindicated under § 1983 as different from the question of whether a private cause of action can be implied from that statute, see Wilder v. Virginia Hosp. Assoc., 496 U.S. 498, 508 n.9 (1990), the § 1983 experience is of some use in considering the implication question. Therefore, the Article in various places makes reference to the Court's § 1983 analysis. Finally, the Article does not address the related, but distinct, doctrine of standing, although much of the Supreme Court's analysis of standing under the Administrative Procedure Act to seek judicial review of agency action resembles its language in implication cases. See, e.g., Clarke v. Securities Indus. Ass'n, 479 U.S. 388 (1987); Association of Data Processing Serv. Org. v. Camp, 397 U.S. 150 (1970); see Paul Wartelle & Jeffrey H. Louden, Private Enforcement of Federal Statutes: The Role of the Section 1983 Remedy, 9 HASTINGS CONST. L.Q. 487, 492-504 (1982) (discussing parallels between standing and implied right of action doctrines).
18. The focus here is on the view of the U.S. courts. I view the U.S. history of the implication doctrine as more meaningful than the English history: U.S. courts have had to evaluate federal statutes against the background of a Constitution that suggests a division of functions between the legislature and the judiciary. See U.S. CONST. art. I, § 1; id. art. III, § 1. Having said that, it is true that early U.S. implication decisions cite the principles espoused by Coke, Comyn's Digest and others in England. See, e.g., Texas & Pacific Ry. v. Rigsby, 241 U.S. 33, 39-40 (1916) (citing British digests and cases); Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163 (1803) (citing Blackstone's Commentaries); Brown v. United States (Brown's Case), 6 Ct. Cl. 171 (1870) (noting that every British subject suffering legal wrong shall have redress); Bullard v. Bell, 4 F. Cas. 624, 639 (C.C.N.H. 1817) (No. 2121) (relying on the basic rule established by six centuries of English practice stating that when a statute creates a liability, a private remedy is to be given to the party wronged). For other accounts of the history of the implication doctrine, see Noyes, supra note 12; H. Miles Foy, III, Some Reflections on Legislation, Adjudication, and Implied Private Actions in the State and Federal Courts, 71 CORNELL L. REV. 501 (1986); Ronfeldt, supra note 12.
19. There is certainly appeal to such a view. As one commentator has noted in the related context of implying remedies for constitutional violations, "[b]y definition, a right must be enforceable. What would be the measure of a right whose transgression carried no penalty? It would look more like a hope, or a request, than a guarantee." Susan Bandes, Reinventing Bivens: The Self-Executing Constitution, 68 S. CAL. L. REV. 289, 306 (1995); see also Ashby v. White, 2 Ld. Raym. 938, 953 (1703) ("It is a vain thing to imagine a right without a remedy; for want of right and want of remedy are reciprocal");
20. KARL N. LLEWELLYN, THE BRAMBLE BUSH 83-84 (1960) ("Absence of remedy is absence of right. Defect of remedy is defect of right. A right is as big, precisely, as what the courts will do.");
21. ROSCOE POUND, JURISPRUDENCE 43 (1959) ("To enforce the duty [the law] allows an action, which has for its end a legal remedy.").
22. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163 (1803) (allowing suit to compel Secretary of State to deliver plaintiff's commission to a federal judge on the grounds that every right withheld must have a remedy, "and every injury its proper redress" because the applicable rule of law would be undermined unless plaintiff could sue for his commission); see also Bullard v. Bell, 4 F. Cas. 624, 639 (C.C.N.H. 1817) (No. 2121) (relying on Comyn's statement "that upon every statute made for the remedy of any injury, mischief, or grievance, an action lies . . . by implication; and that such action shall be a recompense to the party"); cf. Texas & Pac. Ry. v. Rigsby, 241 U.S. 33 (1916) (while this case is often cited as the first to find an implied cause of action under federal law, the earlier cases noted above already recognized the doctrine).
23. See Johnson v. Southern Pac. Co., 196 U.S. 1, 16-18 (1904) (relying on the fact that the purpose of the statute was to protect railroad employees and travelers from injury). The notion first arose in England. See Groves v. Wimborne, 2 Q.B. 402 (1898) (allowing private claim based upon legislative intent); Atkinson v. Newcastle & Gateshead Waterworks Co., 2 Ex. D. 441, 448 (1877) (noting that whether an action was available would depend upon "the purview of the legislature in the particular statute, and the language which they have there employed").
24. An example is Rigsby, 241 U.S. at 41-42, which held that there was an implied private cause of action pursuant to the Safety Appliance Act, 45 U.S.C. § 4 (1994), since the wrong proscribed by the statute must have adjudicatory consequences. Id.; see Noyes, supra note 12 (generally discussing Rigsby); see also Texas & New Orleans R.R. v. Brotherhood of Ry., 281 U.S. 548, 569-70 (1930) (existence of a statutory right implies the existence of all necessary and appropriate remedies).
25. See, e.g., Lowe v. General Motors Corp., 624 F.2d 1373, 1380 (5th Cir. 1980) (violation of Alabama law is negligence per se); Ross v. Hartman, 139 F.2d 14, 15 (D.C. Cir. 1943) (violation of traffic ordinance of District of Columbia constituted negligence per se), cert. denied, 321 U.S. 790 (1944); Lukaszewicz v. Ortho Pharmaceutical Corp., 510 F. Supp. 961, 965 (E.D. Wis. 1981) (holding that manufacturer's violation of Federal Food, Drug & Cosmetic Act constituted negligence per se under the laws of Wisconsin).
26. Although the negligence per se claim is not the same as an implied cause of action - in the former the cause of action is a state law tort claim, whereas the latter is a federal statutory cause of action - the two claims get the plaintiff to the same place.
27. Act of Mar. 3, 1875, ch. 137, § 1, 18 Stat. 470 (codified at 28 U.S.C. § 1331 (1994)) (giving federal courts general federal question jurisdiction over all civil suits at common law or at equity arising under the Constitution or laws of the United States).
28. As a result of the enactment of a massive amount of New Deal legislation, by 1934, there were 557 basic codes enacted, "covering everything from steel production to the corncob pipe industry." BARBARA HABENSTREIT, CHANGING AMERICA AND THE SUPREME COURT 97 (1970).
29. Another voluminous flood of legislation was passed by Congress under the leadership of President Johnson in the 1960s. See RAYMOND MOLEY, THE FIRST NEW DEAL 335 (1966).
30. 291 U.S. 205 (1934).
31. 241 U.S. 33 (1916).
32. Act of March 2, 1893, ch. 196, 27 Stat. 531 (codified at 45 U.S.C. § 4 (1994)).
33. 291 U.S. at 214.
34. 304 U.S. 64 (1938).
35. Erie essentially abolished "federal general common law" as opposed to the more limited form of federal common law-making power the federal courts continue to enjoy. John B. Corr, Thoughts on the Vitality of Erie, 41 AM. U. L. REV. 1087, 1088 n.4 (1992); see Wheeldin v. Wheeler, 373 U.S. 647, 651 (1963) (implying a right of action for damages where Congress did not clearly provide for one is tantamount to fashioning a common law right, which Erie does not allow);
36. George D. Brown, Of Activism and Erie - The Implication Doctrine's Implications for the Nature and Role of the Federal Courts, 69 IOWA L. REV. 617, 627-37 (1984) (discussing the Erie doctrine in the context of implied rights of action); Noyes, supranote 12, at 170-71 (prior to Erie, federal courts utilized a general common law standard of jurisprudence in their decisionmaking and often referred to state statutes to establish the existence of a cause of action); see also Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630 (1981) (rejecting federal common law as a basis for creating a right of contribution with respect to violations of Sherman Act and Clayton Act); Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 95-97 (1981) (declining to create a right of contribution under the Equal Pay Act or Title VII of the Civil Rights Act as a matter of federal common law, emphasizing that federal courts are courts of limited jurisdiction with limited power to make common law); Smith v. Dearborn Fin. Serv., Inc., 982 F.2d 976 (6th Cir. 1993) (rejecting the ability of the courts to create a private right of action under the Federal Credit Union Act in reliance on federal common law because ability of federal courts to create common law is limited to narrow classes of cases).
37. They, however, did not cease to do so completely. For example, Kardon v. National Gypsum Co., 69 F. Supp. 512 (E.D. Pa. 1946), the first case to recognize an implied cause of action under § 10(b) of the Exchange Act, cited the Restatement of Torts rule that "[t]he disregard of the command of a statute is a wrongful act and a tort." Id. at 513. Absent clear legislative intent to deny injured parties the "fundamental" right to recover damages, the court was unwilling to negate "what the general law implies." Id. at 514. Although state courts may still find that the violation of a federal statute constitutes negligence per se, they cannot exercise that ability in the case of federal statutes that provide for exclusive federal jurisdiction. That is not a small limitation. Federal courts have exclusive jurisdiction over actions arising under, for example, the Bankruptcy Code, various federal antitrust statutes and under federal patent and copyright laws. DAVID P. CURRIE, FEDERAL COURTS 201-06 (3d. ed. 1982);
38. Pauline E. Calande, Note, State Incorporation of Federal Law: A Response to the Demise of Implied Federal Rights of Action, 94 YALE L.J. 1144, 1159 n.83 (1985).
39. See, e.g., Wheeldin v. Wheeler, 373 U.S. 647 (1963) (no private right of action under the Civil Rights Act since suits against federal officials could have been maintained under state law); T.I.M.E. Inc. v. United States, 359 U.S. 464 (1959) (§ 216(j) of the Motor Carrier Act does not give shippers a statutory cause of action since the statute only provides for agency enforcement and since Congress failed to adopt a recommended amendment which would have allowed for such suits); General Comm. v. Southern Pac. Co., 320 U.S. 338 (1943) (Congress intended that controversies about § 2 of the Railway Labor Act be addressed by agencies or tribunals other than the courts); Switchmen's Union v. National Mediation Bd., 320 U.S. 297 (1943) (same).
40. 377 U.S. 426 (1964).
41. Id. at 430-31. In Borak, the Court suggested that implication of a private cause of action is appropriate if a private remedy would further the larger policies and purpose of Congress, and it found that private enforcement was a necessary supplement to public enforcement by the SEC. Id. at 432-33. The Court also relied on the fact that the chief purpose of the Exchange Act is protection of investors, which implies the appropriateness of judicial relief when necessary to achieve that result. Id.
42. See, e.g., Securities Investor Protection Corp. v. Harbour, 421 U.S. 412 (1975) (no private right of action under the Securities Investor Protection Act of 1970, which is enforceable by administrative proceedings and government suits); National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453 (1974) (no private right of action under the Rail Passenger Service Act of 1970 in light of Attorney General's express enforcement authority); Calhoon v. Harvey, 379 U.S. 134 (1964) (no private right of action to enforce Title IV of the Labor-Management Reporting and Disclosure Act of 1959 given administrative remedies for enforcement).
43. See, e.g., Rosado v. Wyman, 397 U.S. 397 (1970) (Social Security Act of 1935, as amended in 1967); Allen v. State Bd. of Elections, 393 U.S. 544 (1969) (Voting Rights Act of 1965); Wyandotte Transp. Co. v. United States, 389 U.S. 191 (1967) (Rivers and Harbors Act of 1899); Hewitt-Robins Inc. v. Eastern Freight-Ways, Inc., 371 U.S. 84 (1962) (Motor Carrier Act); Turnstall v. Brotherhood of Locomotive Firemen & Enginemen, 323 U.S. 210 (1944) (Railway Labor Act).
44. LOUIS LOSS, FUNDAMENTALS OF SECURITIES REGULATION 1058 (1983);
45. see also 1 ALAN R. BROMBERG & LEWIS B. LOWENFELS, SECURITIES FRAUD & COMMODITIES FRAUD § 2.2, at 462 (2d ed. 1994) (referring to the same period as the "expansion era" of implying causes of action).
46. 422 U.S. 66 (1975).
47. Id. at 68.
48. In the Court's view, implication was neither suggested by the legislative context of the statute nor required to accomplish Congress's purposes in enacting the statute. Id. at 69.
49. Id. at 78. In enunciating these four factors, the Court viewed itself as synthesizing elements from its prior decisions, rather than establishing a completely new test for analyzing implication cases. For the first element, the Court cited Rigsly. Id. (citing Texas & Pac. Ry. v. Rigsby, 241 U.S. 33, 39 (1916)). For the second and third factors, the Court referenced its decision in National Ry. Passenger Corp. v. National Ass'n of Ry. Passengers. Id. (citing National Ry. Passenger Corp. v. National Ass'n of Ry. Passengers, 414 U.S. 453, 458, 460 (1974)). For the fourth factor, the Court made reference to Wheeldin and Borak, the latter as an instance where the concerns expressed in Erie are not present. Id. (citing Wheeldin v. Wheeler, 373 U.S. 647, 652 (1963)); J.I. Case Co. v. Borak, 377 U.S. 426, 434 (1964)).
50. The more recent view of the Court, however, regards all of the Cort factors only as indicators of congressional intent. See Suter v. Artist M., 503 U.S. 347, 363 (1992) (Cort places burden on plaintiff to demonstrate Congress's intent to make a private remedy available); Thompson v. Thompson, 484 U.S. 174, 179 (1987) (the four factors in Cort are guides to discerning congressional intent); Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 91 (1981) (same); Davis v. Passman, 442 U.S. 228, 241 (1979) (Cort states the "criteria through which [Congress's] intent could be discerned.").
51. See, e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 316-17 (1979) (Trade Secrets Act); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 61 (1978) (Indian Civil Rights Act); Piper v. Chris-Craft Indus., 430 U.S. 1, 37-41 (1977) (analyzing the Williams Act using the Cort factors, with particular emphasis on the intended class of beneficiaries). In each of these cases, the Court declined to imply a private cause of action.
52. See, e.g., Sears, Roebuck & Co. v. Eckerd, 575 F.2d 1197, 1202 (7th Cir. 1978) (finding no implied right of action under the Freedom of Information Act because of failure to meet the second and third Cort factors); Keaukaha-Panaewa Community Ass'n v. Hawaiian Homes Comm'n, 588 F.2d 1216, 1224 (9th Cir. 1978) (holding no implied private right of action under the Hawaii Admission Act because third and fourth prong of Cort test were failed), cert. denied, 444 U.S. 826 (1979); Abrahamson v. Fleschner, 568 F.2d 862, 873 (2d Cir. 1977) (finding an implied right of action under § 206 of the Advisers Act applying the Cort factors); Mason v. Belieu, 543 F.2d 215, 221 (D.C. Cir. 1975) (finding the Cort factors to be "determinative of courts' authority to imply remedies" under the Federal Aviation Act).
53. 441 U.S. 677 (1979).
54. Id. at 702-03, 717. Section 901 of Title IX prohibits discrimination on the basis of sex in educational programs or activities receiving governmental financial assistance. 20 U.S.C. § 1681 (1988). The statute does not, however, expressly authorize a private right of action in favor of a person injured by a violation of § 901. Id.
55. 441 U.S. at 688.
56. 442 U.S. 560 (1979).
57. Section 17(a) of the Exchange Act simply provides that a broker dealer is required to file certified financial statements with the SEC for the purpose of checking compliance with net capital requirements. 15 U.S.C. § 78q(a) (1988). Nevertheless, in Touche Ross an action was brought against a broker dealer's accountants for allegedly improperly auditing and certifying the financial statements. The action sought damages to recompense the broker dealer's customers who lost money when the firm was liquidated. 442 U.S. at 565-66.
58. Touche Ross, 442 U.S. at 568.
59. Id. at 575. The Court concluded that, on its face, § 17(a) was not intended to provide an implied private cause of action because it "grants no private rights to any identifiable class and proscribes no conduct as unlawful." Id. at 576. In addition, the Court found no legislative history expressing such an intent. Id. In contrast, it noted that other provisions in the Exchange Act expressly grant private rights of action for similar types of wrongdoing, which suggested a lack of intent to create one here. Id. at 571-72.
60. 444 U.S. 11 (1979).
61. What is interesting about Transamerica is that the Court frames the basic issue in terms of whether to imply a cause of action, while the case really is about relief. There is no question that Congress intended some private right of action under the Advisers Act. As the Court recognized, Congress intended private enforcement by making certain contracts void, therefore implying at least a cause of action for rescission or injunction. Id. at 16-17. However, the Court came to a different conclusion with respect to damages and other monetary relief, noting that when a statute provides a particular remedy (here judicial and administrative means of enforcement), courts should be hesitant to read others in. Id. at 20. That is especially true in this context since there are other securities law provisions that explicitly provide for damage remedies. Id. at 21. The dissent faulted the majority for "confusing the inquiry into the existence of a right of action with the question of available relief" and found the majority's conclusions inconsistent with the decisions of all courts which had previously addressed the issue and with prior Supreme Court decisions recognizing private damages actions under the securities laws. Id. at 25 (White, J., dissenting). The confusion is surprising since the Court clearly views the issue of damages in implication cases as distinct from the issue of whether a private cause of action exists. See infra note 74; see also infra text accompanying notes 72-82.
62. Transamerica, 444 U.S. at 18. The Court also emphasized that the statute had provided for both criminal and civil means of remedying a violation through action brought by the SEC. Id. at 20. Thus, the Court stated that it would be improbable that Congress simply forgot to include a private damage remedy in the provision. Id.
63. Id; see Tamar Frankel, Implied Rights of Action, 67 VA. L. REV. 553 (1981) (suggesting that the results in Transamerica and Touche Ross are motivated by private securities law claims particularly rather than by implied causes of action methodology generally); Grundfest, supra note 12 (suggesting that the SEC reform securities laws by disimplying private rights of action).
64. See Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994) (where statute does not resolve case, the issue is how the Congress that passed the Exchange Act would have viewed the implication question); Karahalios v. National Fed'n of Fed. Employees, Local 1263, 489 U.S. 527, 532 (1989) (ultimate issue in whether to imply a private cause of action is one of intent; no intent to allow private cause of action for breach of statutory duty of fair representation under Title VII of the Civil Service Reform Act); Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985) (no intent to allow private cause of action under ERISA for extra-contractual damage from improper processing of benefit claims); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 377-78 (1982) (ultimate consideration was whether Congress affirmatively intended to create a damages remedy); California v. Sierra Club, 451 U.S. 287, 294 (1981) (no private cause of action because § 10 of the Rivers and Harbors Appropriation Act of 1899, which prohibits the creation of an obstruction of a navigable waterway, is a general prohibition intended to benefit public at large and not intended to confer rights on a particular class of persons; ultimate issue is congressional intent, but Cort factors are criteria through which this intent could be discerned); Universities Research Ass'n v. Coutu, 450 U.S. 754, 770 (1981) (in order to ascertain legislative intent, the Court considered three of the four Cort factors).
65. See, e.g., Government of Guam v. American President Lines, 28 F.3d 142, 147 (D.C. Cir. 1994) (no implied private right of action under the Shipping Act because of the absence of congressional intent); American Tel. & Tel. Co. v. M/V Cape Fear, 967 F.2d 864, 866 (3d Cir. 1992) (no private right of action under Submarine Cable Act for damage to cable, using the Cort factors, with emphasis on the first two as indicative of congressional intent); Taylor v. Brighton Corp., 616 F.2d 256, 264 (6th Cir. 1980) (no private cause of action under the Occupational Safety and Health Act because of absence of legislative intent); Rogers v. Frito-Lay, Inc., 611 F.2d 1074, 1080 (5th Cir. 1980) (no implied cause of action under the Rehabilitation Act of 1973 because of absence of congressional intent); Ryan v. Ohio Edison Co., 611 F.2d 1170, 1176 (6th Cir. 1979) (no implied cause of action despite fact that plaintiff was a member of the class the Bankruptcy Act was intended to benefit and implication consistent with the provisions of the Act because no legislative history suggesting Congress intended to create private cause of action). But see Local Div. 1285, Amalgamated Transit Union v. Jackson Transit Auth., 650 F.2d 1379, 1385 (6th Cir. 1981) (finding implied cause of action under Urban Mass Transportation Act based on Cort analysis; court notes that if there had been an adequate administrative remedy in the statute, result might be different); Zeffiro v. First Pennsylvania Banking & Trust Co., 623 F.2d 290, 296-301 (3d Cir. 1980) (finding implied cause of action under Trust Indenture Act of 1939 based on Cort analysis).
66. See supra cases cited in note 53. This notion severely limits the availability of implied causes of action. See Donna L. Goldstein, Note, Implied Private Rights of Action Under Federal Statutes: Congressional Intent, Judicial Deference, or Mutual Abdication?, 50 FORDHAM L. REV. 611, 612 (1982) (characterizing the revised Cort test employed by courts as one that will rarely lead to a conclusion that a private action should be implied). Although the post-1979 cases all say that implication is exclusively an issue of congressional intent, the Court does on occasion look beyond intent. See, e.g., Universities Research Ass'n v. Coutu, 450 U.S. 754, 782 (1981) (following analysis of congressional intent with a consideration of the uncertainty that would be introduced into government contracting by implication of a private right of action under the Davis-Bacon Act); see also Chiarella v. United States, 445 U.S. 222 (1980) (basing its decision regarding the scope of the implied § 10(b) cause of action more upon an analysis of the common law of fraud than upon an analysis of congressional intent).
67. For example, prior to Cort v. Ash, a number of courts found that a private cause of action exists under § 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) (1994). See, e.g., Newman v. Prior, 518 F.2d 97 (4th Cir. 1975) (filed the same day as Cort); Dasho v. Susquehanna Corp., 380 F.2d 262, 267 (7th Cir.), cert. denied, 389 U.S. 977 (1967); Fischman v. Raytheon Mfg. Co., 188 F.2d 783, 787 n.2 (2d Cir. 1951); Schaefer v. First Nat'l Bank, 326 F. Supp. 1186, 1189 (N.D. Ill. 1970). In the wake of Cort, a number of courts have reevaluated that position and a growing trend disfavors the existence of a private cause of action under § 17(a). See, e.g., Newcome v. Esrey, 862 F.2d 1099 (4th Cir. 1988) (reversing Newman v. Prior); Currie v. Cayman Resources Corp., 835 F.2d 780, 784 (11th Cir. 1988); In re Washington Pub. Power Supply Sys. Sec. Litig., 823 F.2d 1349, 1358 (9th Cir. 1987) (en banc) (reversing earlier Ninth Circuit rulings on the issue). Newcome, in particular, provides an extensive analysis of the Cort factors, with a focus on the indicia of legislative intent See Newcome, 862 F.2d at 1103-07.
68. See Foy, supra note 13. Professor Foy has also suggested that the history of implied private action has been a "history of changing conceptions about the nature of legislation, the role of the courts, and the rights of citizens in a government under law." Id. at 524.
69. At one level, this is understandable. Claims arising under the Constitution involve claimed violations by governmental authorities. Given that the concern is with governmental excesses, there is good reason to want the judiciary to be alert to failures of Congress to provide a remedy for those injured by the excesses. On the other hand, the federal question statute, 28 U.S.C. § 1331 (1994), which the Court views as sufficient congressional authorization for courts to infer causes of action directly from the Constitution, Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 398-405 (1971) (Harlan, J., concurring), could present an equally sufficient congressional authorization for courts to imply causes of action from federal statutes. Courts, however, have not adopted this argument. See, e.g., Touche Ross & Co. v. Redington, 442 U.S. 560, 577 (1979); American Tel. & Tel. Co. v. M/V Cape Fear, 967 F.2d 864, 868-69 (3d Cir. 1992).
70. 403 U.S. 388 (1971).
71. Id. at 397.
72. Id. at 396-97 (citing Wheeldin v. Wheeler, 373 U.S. 647 (1963)). Both the majority and concurring opinions in Bivens suggest that implication might be inappropriate if Congress expressly declared an intent that an alternative remedy for constitutional violations was appropriate. Id. at 397, 402-03 (Harlan, J., concurring). If implication of private causes of action from statutes does not create separation of powers problems, as this Article later argues in the text accompanying notes 104-09, then courts should be as free to imply in statutory situations as they are when a claim arises under the Constitution, suggesting that the Bivens line of cases should be given more weight by courts in deciding statutory implication cases.
73. 442 U.S. 228 (1979).
74. The Davis Court adopted a three-step analysis to determine whether to imply a private right of action under the Fifth Amendment. First, were the Fifth Amendment rights violated? Id. at 234. Second, did the petitioner have a cause of action and was the petitioner a member of the class entitled to invoke the right? Id. at 236-44. Third, is the damage remedy an appropriate form of relief? Id. at 244. The Court held that there was such an implied cause of action, and a damage remedy was appropriate both because it has historically been available (citing Bell v. Hood), and because there was no explicit congressional declaration that damages may not be recovered in such an action. Id. at 244-45 (citing Bell v. Hood, 327 U.S. 678 (1946)).
75. 42 U.S.C. § 1983 (1988). In Maine v. Thiboutot, 448 U.S. 1 (1980), the Supreme Court held that § 1983 was not limited to redressing violations of civil rights statutes, but that plaintiffs may seek redress under § 1983 for a violation of any federal statute that occurs under color of state law. Id. at 4-8. In subsequent decisions, the Court has formulated more limited notions of when a federal statute creates a right that may be redressed through § 1983. See Dennis v. Higgins, 498 U.S. 439, 448 (1991) (noting three-part test to determine whether a statute confers a "right" within the meaning of § 1983); Wider v. Virginia Hosp. Ass'n, 496 U.S. 498 (1990); Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103 (1989); Wright v. City of Roanoke Redevelopment & Hous. Auth., 479 U.S. 418 (1987). Despite its limitations, the § 1983 cause of action may represent an alternative to plaintiffs who would seek an implied cause of action when the state action requirement can be satisfied.
76. See Wilder, 496 U.S. at 508 n.9.
77. See J.I. Case v. Borak, 377 U.S. 426 (1964) (holding that a private cause of action is available under § 14(a) of the Exchange Act).
78. See Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103 (1989).
79. See Wilder, 496 U.S. at 514.
80. See Golden State Transit, 493 U.S. at 106-07 (1989); Smith v. Robinson, 468 U.S. 992 (1984); Middlesex County Sewarage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1 (1981); Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1 (1981).
81. As suggested vvith respect to direct constitutional claims, the fact that § 1983 involves state action may justify more liberalism in deciding whether a cause of action exists. See supra note 58. For discussions of when the Thiboutot presumption in favor of a § 1983 action should be overcome, see George D. Brown, Whither Thiboutot? Section 1983 Private Enforcement, and the Damages Dilemma, 33 DEPAUL L. REV. 21 (1983);
82. Cass R. Sunstein, Section 1983 and the Private Enforcement of Federal Law, 49 U. CHI. L. REV. 394 (1982).
83. Depending on the source of the right and the identity of the wrongdoer, one may seek redress by means of a § 1983 suit, a direct Bivens constitutional claim, or an implied statutory cause of action. Where the wrongdoer is someone acting under color of state law, the avenue of redress will be § 1983 for both constitutional and statutory violations (assuming in the latter case that there is no express statutory cause of action), although a statutory violation may also give rise to an implied cause of action. Where the wrongdoer is a federal official, a direct constitutional claim may lie for constitutional violations; for statutory violations, a plaintiff will have to resort to an implied cause of action analysis (again, assuming no express statutory relief). Where the defendant is a private individual, the harm generally involves a statutory violation and, absent an express statutory remedy for the plaintiff, the issue is whether there is an implied cause of action. Courts have been inconsistent in dealing with situations where a plaintiff alleges both a § 1983 violation and an implied cause of action. Some courts appear to analyze the questions identically, some allow a § 1983 cause of action where there is no implied cause of action, and others hold that the availability of an implied cause of action precludes a § 1983 cause of action. See, e.g., Chan v. City of New York, 1 F.3d 96 (2d Cir. 1993) (allowing a § 1983 cause of action but not an implied private right of action); Boatowners & Tenants Ass'n v. Port of Seattle, 716 F.2d 669 (9th Cir. 1983) (allowing a § 1983 cause of action but not an implied cause of action); Uniformed Firefighters Ass'n v. City of New York, 676 F.2d 20, 22-23 (2d Cir. 1982) (analyzing § 1983 and implied causes of action identically); Longoria v. Harris, 554 F. Supp. 102, 107 (S.D. Tex. 1982) (implied right of action precludes § 1983 cause of action).
84. Davis v. Passman, 442 U.S. 228, 239 (1979) (footnote omitted). That question arises where a statute is completely silent as to the existence of a private cause of action, such as, for example, Title IX of the Education Amendments of 1972, 20 U.S.C. § 1761-1788 (1988); the Investment Advisers Act, 15 U.S.C. § 80b-1 (1988); or § 10(b) of the Exchange Act, 15 U.S.C. § 78j(b) (1988).
85. When a statute grants an explicit private cause of action and does not provide certain remedies, courts may be asked to imply them. For example, the Employee Retirement Income Security Act of 1974 (ERISA) grants a cause of action in favor of pension and welfare benefit plan participants and beneficiaries. 29 U.S.C. § 1132 (1988). The statute does not, however, make compensatory damages available to such plaintiffs.
86. The Supreme Court views the issue of damages in implication cases as "analytically distinct" from the issue of whether an implied private cause of action exists. Guardians Ass'n v. Civil Serv. Comm'n, 463 U.S. 582, 595 (1983); Davis v. Passman, 442 U.S. 228, 239 (1979). So, for example, while the Supreme Court decided in Cannon v. University of Chicago, 441 U.S. 677 (1979), that there was an implied cause of action under Title IX of the Education Amendments of 1972, it was not until Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992), that the Court addressed the question whether monetary damages can be awarded for Title IX violations. But see Michael A. Mazzuchi, Note, Section 1983 and Implied Rights of Action: Rights, Remedies, and Realism, 90 MICH. L. REV. 1062 (1992) (rejecting a distinction between rights and remedies). Courts did not always take this bifurcated view; earlier Supreme Court decisions presume that all appropriate remedies are available in an implied private right of action under a federal statute. See J.I. Case Co. v. Borak, 377 U.S. 426, 433-34 (1964); Bell v. Hood, 327 U.S. 678, 684 (1946).
87. See Lampf, Pleva, Lipkind, Pruspis & Petigrow v. Gilbertson, 501 U.S. 350 (1991) (addressing statute of limitations for implied cause of action under § 10(b) of the Exchange Act). 76 See 29 U.S.C. § 1109(a) (1994).
88. In Mertens v. Hewitt Assocs., 113 S. Ct. 2063 (1993), the Court treated the claim as a separate cause of action. Id. at 2067.
89. In Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994), the majority and the dissent took different positions on this question. See id. at 1445; see also id. at 1456 (Stevens, J., dissenting).
90. The Court's 1993 decision in Musick, Peeler & Garrett v. Employers Ins., 113 S. Ct. 2085 (1993), suggests that contribution is a separate cause of action, while its 1994 decision in Central Bank v. First Interstate Bank, 114 S. Ct. 1439, 1445-48 (1994), suggests that contribution is an element of another cause of action. See also Nicholas Day, Note, The United States Supreme Court Recognizes an Implied Right of Contribution for Defendants in Rule 10b-5 Actions in Musick, Peeler & Garrett v. Employers Insurance of Wausau: A Judicial Oak Grows from the Sand, 39 VILL. L. REV. 165, 188 (1994) (suggesting that the Supreme Court's decision creates difficulty in distinguishing when a cause of action is ancillary to a 10b-5 claim);
91. Francine J. Rosenberger, Note, Musick, Peeler & Garrett v. Employers Insurance: Will the Judicial Oak Seed A Judicial Forest, 43 CATH. U. L. REV. 987, 1018 (1994) (stating that the "Supreme Court blurred a rather clear distinction between causes of action and remedies").
92. For example, in Piper v. Chris-Craft Indus., 430 U.S. 1 (1977), the majority analyzed the case as though it were deciding whether there was a private cause of action under § 14(e) of the Exchange Act. Id. at 24. However, the real question was who may invoke the remedy. While § 14(e) clearly provided a private right of action, it was unclear whether the right applied to unsuccessful tender offerers as well as shareholders. Id. at 55 (Stevens, J., dissenting). Similarly, in Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11 (1979), the Court framed the issue in terms of whether to imply a cause of action, but the issue really was what relief was available in a private right of action. See supra note 50. The distinction between cause of action and remedy has also become "hopelessly muddled" in cases involving implication of claims from the Constitution. See Bandes, supra note 14, at 302.
93. Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994).
94. See supra notes 126-28.
95. See infra text accompanying notes 133-39 (suggesting that the answer is yes).
96. 113 S. Ct. 2085 (1993). In contrast to Mustek, Peeler's holding that contribution could be implied in a § 10(b) action, the Court in Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77 (1981), declined to imply a contribution claim under the Equal Pay Act and Title VII of the Civil Rights Act, analyzing the question with reference to congressional intent. Id. at 91. The Court engaged in a similar intent analysis in declining to imply a right of contribution in favor of a party liable under express provisions of the Sherman Act and Clayton Act. See Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
97. Musick, Peeler, 113 S. Ct. at 2088. The Court made the same suggestion in Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992), where plaintiff sought compensatory damages under the implied cause of action for enforcement of Title IX that the Court had previously recognized in Cannon. Id. at 71. The Supreme Court viewed the question of compensatory damages as a determination of remedies available under the implied cause of action already recognized in Cannon, and not a determination of the existence of a new, separate cause of action for damages. Id. The Court concluded that damages were available, and its broad language suggested a distinction between analyzing ancillary issues for implied or express causes of action. Id. Likewise, in Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991), when analyzing the question of causation in a private right of action under the federal proxy rules, the Court reasoned that "[in Blue Chip Stamps], we accepted the proposition that where a legal structure of private statutory rights has developed without clear indications of congressional intent, the contours of that structure need not be frozen absolutely when the result would be demonstrably inequitable to a class of would-be plaintiffs with claims comparable to those previously recognized." Id. at 1104. This analysis suggests that when an implied cause of action proceeds in absence of congressional intent (and perhaps even when there is no congressional intent), courts have more freedom in handling ancillary issues. Cf. Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60, 77 (1992) (Scalia, J., concurring) ("[W]hen rights of action are judicially 'implied,' categorical limitations upon their remedial scope may be judicially implied as well.").
98. See Bedoya-Valencia v. INS, 6 F.3d 891, 896-97 (2d Cir. 1993) (relying on Musick, Peeler for the proposition that extension of a judiciallly implied waiver to a different fact pattern is not a matter of congressional intent); In re Walker, 168 B.R. 114, 118 (E.D. La. 1994) (finding Musick, Peeler inapposite to its refusal to find a right of contribution under the bankruptcy laws because that case involved a judicially created private right of action while the bankruptcy right of action was the result of a congressional pronouncement).
99. In Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985), the Court addressed whether an in pari delicto defense by a tipper against a tippee barred recovery for the tippee on a § 10(b) claim. Id. at 301. The tipper argued that because that § 10(b) cause of action was implied, rather than expressly defined by Congress, the Court should adopt a broad application of common law doctrine such that the in pari delicto defense could be added to the § 10(b) cause of action. Id. at 309. The Court rejected the proposed implied/express distinction for this ancillary issue, even though the action was not implied based on congressional intent. Id. at 310. A related issue is whether implication analysis itself should be affected by the type of remedy sought. Some courts have suggested that it should not. See Health Care Plan v. Aetna Life Ins. Co., 966 F.2d 738, 742 (2d Cir. 1992) (relying on the Supreme Court decisions in Suter v. Artist M., 503 U.S. 347 (1992); Franklin v. Gwinnett County Pub. Schs., 503 U.S. 60 (1992)).
100. This position could be justified either on a negligence per se theory or on grounds of desire to provide plaintiff with a remedy.
101. The difference between points 3 and 4 on the spectrum is whether congressional intent is one among many factors, or whether it is the dominant factor, creating a presumption which may or may not be modified by analysis of other factors.
102. See Ezra R. Thayer, Public Wrong and Private Action, 27 HARV. L. REV. 317, 320 (1914) (suggesting that a plaintiff has a cause of action against a defendant who violated prohibitive legislation only if the common law would impose liability; in the absence of a common law duty, one should not speculate as to unexpressed legislative intent and create private remedies by implication). This strict construction approach has been uniformly rejected by courts and has been criticized by commentators as well. See also Foy, supra note 13 (suggesting this strict construction approach as a possibility, but repudiating it later in the Article).
103. Any multi-factored test will result in a certain lack of predictability, as illustrated by the fact that the Court has reversed numerous Court of Appeals decisions applying the Cort factors. See, e.g., California v. Sierra Club, 451 U.S. 287 (1981); Universities Research Ass'n, Inc. v. Coutu, 450 U.S. 754 (1981); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11 (1979); Touche Ross & Co. v. Redington, 442 U.S. 560 (1979); Cannon v. University of Chicago, 441 U.S. 677 (1979).
104. In his separate opinion in Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1 (1981), Justice Stevens suggested that the restrictiveness of the intent analysis may reflect concerns about the burdens imposed upon the federal judiciary, the quality of the work product of Congress and the sheer bulk of new federal legislation. Id. at 24-25 (Stevens, J., dissenting). The Court made the same suggestion in Merrill Lynch, Pierce, Fenner & Smith, Inc. v Curran, 456 U.S. 353, 374 (1982). See also Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 428-29 (1971) (Black, J., dissenting) (counseling against creation of a private cause of action under the Fourth Amendment based on the volume of cases in the courts).
105. See infra text accompanying notes 266-73 for a discussion of federalism issues raised by implication of private causes of action from federal statutes.
106. The first two questions are not unrelated. Unless it is possible to reliably ascertain congressional intent, intent should not be a factor in implication analysis. Thus, Subsection A assumes that intent can be reliably ascertained in order to address whether such intent should be a factor. Subsection B then demonstrates that, in fact, courts have the means to reliably ascertain such intent.
107. Touche Ross, 442 U.S. at 568 (1979).
108. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15-16 (1979).
109. Cannon v. University of Chicago, 441 U.S. 677, 688 (1979).
110. Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388, 403 n.4 (1971) (Harlan, J., concurring) (emphasis omitted).
111. Central Bank v. First Interstate Bank, 114 S. Ct. 1439, 1448-50 (1994). In Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77 (1981), the Court summarized the distinction between statutory interpretation and implication: "In almost any statutory scheme, there may be a need for judicial interpretation of ambiguous or incomplete provisions. But the authority to construe a statute is fundamentally different from the authority to fashion a new rule or to provide a new remedy which Congress has decided not to adopt." Id. at 97; see also Mowe, supra note 12, at 7 (noting that implication is not necessarily a process of statutory interpretation); John Haried, Comment, Implied Causes of Action: A Product of Statutory Construction or the Federal Common Law Power?, 51 U. COLO. L. REV. 355, 363-70 (1980) (suggesting that in a classical sense implication has never been a matter of strict statutory construction because it invariably requires the court to go beyond clearing up ambiguities or filling in gaps in the legislation).
112. Many modern theories of statutory interpretation reject the notion that what courts should be doing in interpreting statutes is striving to follow legislative intent. See, e.g., RONALD DWORKIN, LAW'S EMPIRE 338, 313-54 (1986) (arguing that judges should interpret statutes in "the best light overall," giving statutes an interpretation that is sensitive to the judge's convictions about justice, wise policy, the ideals of political integrity and fairness, and procedural due process);
113. RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 529-30 (4th ed. 1992) (suggesting the utility of economics in statutory interpretation: by grasping the underlying economic logic of a statute, judges can faithfully interpret the statute's purpose).
114. U.S. CONST. art. I, § 1 ("All legislative Powers herein granted shall be vested in a Congress of the United States . . . ."); id. art. III, § 1 ("The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."). Under a strict view of separation of powers, the function of Congress is to make laws and the function of the courts is to decide cases and controversies arising under the law.
115. Cannon v. University of Chicago, 441 U.S. 677, 730-31 (1979) (Powell, J., dissenting); see also Bivens v. Six Unknown Named Agents of the Fed. Bureau of Narcotics, 403 U.S. 388, 411-12 (1971) (Burger, J., dissenting) (suggesting separation of powers concerns limit courts' freedom to imply causes of action). Justice Powell views the four-factor Cort analysis as "an open invitation to federal courts to legislate causes of action not authorized by Congress" and, therefore, as "not faithful to constitutional principles." Cannon, 441 U.S. at 731. Justice Powell overstates the case. Judges may be immune from the political process, but they are not immune to political influences and predispositions.
116. See Thompson v. Thompson, 484 U.S. 174, 188-91 (1988) (Scalia, J., concurring in the judgment) (arguing that the Court should be reluctant to imply a cause of action too freely because doing so would abridge the role of Congress by having the Court act in both a legislative and a judicial capacity).
117. Indeed, even Madison in the Federalist papers said the idea of separation of powers was not absolute. See THE FEDERALIST No. 47, at 302 (James Madison) (Clinton Rossiter ed., 1961).
118. See Buckley v. Valeo, 424 U.S. 1, 121 (1976) (a "hermetic sealing off of the three branches of Government from one another would preclude the establishment of a Nation capable of governing itself effectively"); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 635 (1952) (Jackson, J., concurring) (the Constitution "enjoins upon its branches separateness but interdependence, autonomy but reciprocity"); Richard W. Creswell, The Separation of Powers Implications of Implied Rights of Action, 34 MERCER L. REV. 973, 990-91 (1983).
119. Morrison v. Olson, 487 U.S. 656, 698 (1988); Nixon v. Fitzgerald, 457 U.S. 731, 760-61 (1982) (noting that the purpose of separation of powers is to prevent interference or intimidation from other branches).
120. Creswell, supra note 106, at 993.
121. 456 U.S. 353 (1982).
122. Id. at 375-76. It also has been argued that the Constitution cannot be read as precluding the federal judiciary from making law, suggesting that "if federal judges legitimately may make law when responding to legislative invitation, the horse already is partially out of the barn. In other words, the functional competence of judges to make law is constitutionally admitted Theresa A. Gabaldon, State Answers to Federal Questions: The Common Law of Federal Securities Regulation, 20 J. CORP. L. 155, 167 (1994).
123. See William F. Schneider, Implying Private Rights and Remedies Under the Federal Securities Acts, 62 N.C. L. REV. 853, 896 (1984) (primary problem with the lack of existing structure for implying causes of action is the failure of the Supreme Court to clearly articulate the source or limits of the federal courts' power to imply causes of action).
124. The Supreme Court's behavior with regard to historically recognized private rights of action lacking congressional intent is inconsistent with the notion that the power to imply stems from the intent of Congress. For example, in a recent decision, the Court suggested that congressional intent never supported a private right of action under 10b-5. See Central Bank v. First Interstate Bank, 114 S. Ct. 1439, 1446, 1453 (1994). Yet, the Court is unwilling to disturb the existence of that private right of action. If the courts' power to imply causes of action comes from congressional intent, there is something troubling about allowing continuation of private causes of action that courts believe lack that intent. It would seem strange to allow the private right of action to continue, notwithstanding stare decisis, if one really believes that the courts lack the power to imply a 10b-5 cause of action. To get over the discomfort with that, one would have to argue that Congress's failure to amend § 10(b) to overrule the Court's implication of a private cause of action cures the lack of power. However, one must be cautions in making judgments based on congressional silence. See infra text accompanying note 176.
125. See, e.g., Illinois v. City of Milwaukee, 406 U.S. 91, 103-04 (1972) (air and water pollution); Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 466 (1957) (labor); Clearfield Trust Co. v. United States, 318 U.S. 363, 366-67 (1943) (obligations of the United States on commercial paper). In Illinois v. City of Milwaukee, 406 U.S. 91 (1972), for example, the state of Illinois brought a nuisance action for pollution of an interstate waterway by several cities in Wisconsin. The Court created a federal common law nuisance cause of action, reasoning that the pollution of an interstate waterway arises under the "laws" of the United States because "laws" includes claims based on federal common law. Id. at 99-100. The Court also stated that federal common law remedies may go beyond the statutory remedies provided, as long as they did not contravene those statutory provisions. Id. at 101. But cf. City of Milwaukee v. Illinois, 451 U.S. 304, 335 (1981) (Blackmun, J., dissenting) (claiming that federal common law assured each state the "right to be free from unreasonable interferences with its natural environment and resources" by another state or its citizens long before the Supreme Court's 1972 decision in Illinois v. City of Milwaukee). Similarly, in Textile Workers Union v. Lincoln Mills, the Court created common law pursuant to an affirmative delegation by Congress of authority to do so. 353 U.S. at 448. In that case, a union sued under the LMRA for specific performance of collective bargaining agreements that provided for arbitration. The Court concluded that the applicable substantive law under § 301 (a) of the LMRA is federal law, which the courts must fashion from federal labor law policy. Id. at 456-57. The Court cited Clearfield Trust Co. v. United States to the effect that "[i]t is not uncommon for federal courts to fashion federal law where federal rights are concerned." Id. at 457 (citations omitted). In Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630 (1981) the Court stated that instances where federal courts may create federal common law fall into two categories: (1) instances where federal common law is "necessary to protect uniquely federal interests"(citing Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 426 (1964)); (2) instances where "Congress has given courts the power to develop substantive law." Id. at 640.
126. PAUL M. BATOR ET AL., HART AND WECHSLER'S THE FEDERAL COURTS AND THE FEDERAL SYSTEM 770 (2d ed. 1973);
127. see Thomas W. Merrill, The Common Law Powers of Federal Courts, 52 U. CHI. L. REV. 1, 51 (1985).
128. Professor Merrill argues that federal courts should turn to the federal common law to come up with substantive rules to preserve federal statutory policies where existing state and federal remedies are inadequate. Thomas W. Merrill, The Common Law Powers of Federal Courts, 52 U. CHI. L. REV. 1, 1985). Id.
129. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,426 (1964). Nothing in Erie precludes reliance on federal common law as a source of power for the courts to imply private causes of action from federal statutes. Erie was concerned with the creation of federal common law in diversity cases involving state law questions. Erie R.R. v. Tompkins, 304 U.S. 64 (1938). Erie held that "[e]xcept in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state." Id. at 78. In implication cases, of course, federal courts are reviewing federal statutes.
130. See supra text accompanying note 98.
131. See Koch Indus., Inc. v. Mobil Oil Corp. (In re Department of Energy Stripper Well Exemption Litig.), 968 F.2d 27, 36 (Temp. Emer. Ct. App. 1992) (relying on federal common law power to imply a private cause of action for reimbursement under § 209 of the Economic Stabilization Act of 1970). Some courts have determined that once a cause of action has been implied, the court's decisions on ancillary issues such as contribution are a matter of federal common law. See, e.g., Huddleston v. Herman & MacClean, 640 F.2d 534, 557 (5th Cir. 1981); Heizer Corp. v. Ross, 601 F.2d 330, 331 (7th Cir. 1979). However, some Supreme Court cases suggest that the Court views implied right of action analysis and federal common law analysis differently. See, e.g., Texas Indus, v. Radcliffe Materials, Inc., 451 U.S. 630, 638 (1981) (suggesting that a right to contribution not expressly provided for by statute may arise either by implication or through the power of the federal courts to fashion a federal common law of contribution); Northwest Airlines v. Transport Workers Union, 451 U.S. 77, 90 (1981) (same).
132. See Haried, supra note 99; Merrill, supra note 113. Professor Merrill identifies four principles that limit the lawmaking power of the federal judiciary: federalism, separation of powers, electoral accountability, and the Rules of Decision Act. Merrill, supra note 113, at 12. The Haried Note also identifies four doctrines that limit the power of the courts to create federal common law - two based on principles of federalism and two based on the separation of powers. Haried, supra note 99, at 381-90. First, the common law right must be grounded on a constitutional power peg on which Congress could create such a right. Id. at 381. (This means little in the implication context; since there already is a federal statute in the area, we know Congress could have provided for a private right of action.) Second, state law should not be displaced except when justified by a substantial federal interest in having a uniform federal rule. Id. Third, the court must adhere to the legislative policies of related federal regulatory schemes in fashioning common law. Id. at 383. Fourth, the courts must not offend the separation of powers doctrine by contravening Congress's intent that there be no private cause of action, or by making policy decisions that alter an existing statutory scheme. Id. at 390.
133. 5 U.S. (1 Cranch) 137 (1803). The Court viewed the question of whether or not a right has vested to be judicial by nature, and therefore one which must be tried by the judicial authority. Id. at 167. The Court further believed that once a vested right is determined, there must be a remedy for violation of that right. Id. at 163.
134. See, e.g., Universities Research Ass'n v. Coutu, 450 U.S. 754, 767-84 (1981) (declining to create private action for damages under Davis-Bacon Act because of unwillingness to interfere with and undercut the elaborate and detailed administrative scheme or to destroy the Act's carefully achieved balance between contractor and employee interests). But see Rosado v. Wyman, 397 U.S. 397, 420 (1970) (allowing private cause of action under Social Security Act of 1935 despite intent of Congress to give the Department of Health Education and Welfare the initial review of state plans to ensure compliance with federal law requirements for receiving federal funds, the power to resolve issues arising under the Act, and the power to enforce its requirements against the States).
135. See National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453, 463 (1974) (allowing private cause of action under the Amtrak Act would allow for a myriad of lawsuits that would undercut the efficient administrative apparatus Congress sought to provide for Amtrak's use in discontinuing unecomonic routes); Rosado, 397 U.S. at 432 (Black, J., dissenting) (objecting to decision to allow a private right of action under the Social Security Act because following administrative procedures established by Congress "would render unnecessary countless lawsuits by welfare recipients").
136. See infra cases cited in note 127.
137. Richard B. Stewart & Cass R. Sunstein, Public Programs and Private Rights, 95 HARV. L. REV. 1193, 1290 (1982).
138. Richard B. Stewart & Cass R. Sunstein, Public Programs and Private Rights, 95 HARV. L. REV. 1193, 1982). Id.
139. Id. at 1290-91.
140. Professors Stewart and Sunstein would counter by saying that, when there is clear evidence of a specific legislative policy about enforcement, courts have the ability to refuse to create a right of action that would be inconsistent with that policy. Id. at 1292.
141. Id. at 1304-05.
142. See, e.g., Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1, 13-15 (1981) (given the "unusually elaborate enforcement provisions" of the Federal Water Pollution Control Act, in the absence of strong evidence of a contrary congressional intent, conclusion is that Congress provided "precisely the remedies it considered appropriate"); Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630 (1981) (reaching a similar conclusion in the context of antitrust laws); Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 93-94 (1981) (comprehensive character of Equal Pay Act and Title VII presumptively evinces congressional intent not to authorize an implied remedy); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979) (where statute provides particular remedy, courts "must be chary of reading others" in); Touche Ross & Co. v. Redington, 442 U.S. 560, 571-74 (1979) (same); Cadillac Fairview/California, Inc. v. Dow Chem. Co., 21 Env't Rep. Cas. (BNA) 1108, 1117 (C.D. Cal. 1984) (private cause of action would undermine comprehensive scheme of CERCLA); cf. Smith v. Robinson, 468 U.S. 992, 1012 (1984) (§ 1983 claim precluded because of "carefully tailored" statutory enforcement scheme established by the Education of the Handicapped Act); Great Am. Fed. Sav. & Loan Ass'n v. Novotny, 442 U.S. 366 (1979) (comprehensive remedial scheme of Title VII of the Civil Rights Act of 1964 precludes bringing of private cause of action under § 1985(3)).
143. More broadly, in certain cases the Court has suggested that where there is a right to sue, the federal courts can use any available remedy to make good the wrong. See Bell v. Hood, 327 U.S. 678, 684 (1946); see also Illinois v. City of Milwaukee, 406 U.S. 91, 103 (1972) (remedies Congress provides are not necessarily the only federal remedies available).
144. See Universities Research Ass'n v. Coutu, 450 U.S. 754, 784 (1981); Texas Indus., 451 U.S. at 646-47; City of Milwaukee v. Illinois, 451 U.S. 304, 349 (1981) (Blackmun, J., dissenting).
145. 456 U.S. 353 (1982).
146. Id. at 377. If the legislature really is better able than the judiciary to determine whether and when private enforcement of a statute is appropriate, then courts should be hesitant to imply causes of action absent evidence of congressional intent to allow one. As Justice Rehnquist expressed in his concurrence in Cannon, expansive implication decisions may encourage Congress to rely on the federal judiciary to decide whether a private cause of action should exist, whereas it is far better for Congress to specify when it intends private litigants to have a cause of action. Cannon v. University of Chicago, 441 U.S. 677, 718 (1979) (Rehnquist, J., concurring).
147. Cf. Central Bank v. First Interstate Bank, 114 S. Ct 1439, 1445-46 (distinguishing between scope of conduct prohibited by § 10(b) of the Exchange Act and ancillary elements of the Rule 10b-5 private liability scheme).
148. That is, even if one accepts that intent should play a significant role when addressing the question of adding additional remedies to ones explicitly provided by statute, one should not take the same view when the question is what remedies should be available in a cause of action implied from a federal statute. See supra text accompanying notes 126-28. In the case of an action which itself has been implied, courts should take a broad view of available remedies.
149. 113 S. Ct. 2085 (1993).
150. The basic question of a private cause of action under § 10(b) and Rule 10b-5 has been settled for decades. The earliest decision recognizing a private 10(b) remedy was Kardon v. National Gypsum Co., 69 F. Supp. 512 (E.D. Pa. 1946). See HAROLD S. BLOOMENTHAL, SECURITIES LAW HANDBOOK § 15.01, at 15-2 to 15-3 (1993). The implied private cause of action under § 10(b) and Rule 10b-5 has been described by the Supreme Court as "a judicial oak which has grown from little more than a legislative acorn." Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 737 (1975).
151. The two cases in which the Court refused to recognize a right of contribution were Texas Indus, v. Radcliff Materials, Inc., 451 U.S. 630, 647 (1981) (no right of contribution for recovery based on violation of the Sherman Act and the Clayton Act, where the Clayton Act expressly established a remedy for violation of the law but does not establish a right of contribution), and Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 86 (1981) (no right of contribution against unions alleged to be joint participants with the employer in violation of Title VII of the Civil Rights Act of 1964, where Title VII expressly provides for private actions but not for contribution). In both cases, the Court determined that congressional intent governed whether a right of contribution existed and held that under a congressional intent analysis, no right of contribution existed. Texas Indus., 451 U.S. at 645-46; Northwest Airlines, 451 U.S. at 945.
152. 113 S. Ct. at 2088.
153. Id. The Court recognized that the § 10(b) private cause of action rests "on the theory courts should recognize private remedies to supplement federal statutory duties, not on the theory Congress had given an unequivocal direction to the courts to do so." Id.
154. The Court did give at least some weight to the fact that other Exchange Act provisions conferring a private right of action contain contribution provisions, viewing such as indicating a congressional view toward apportionment of Exchange Act liabilities. Id. at 2090. Whether contribution, ih fact, should be considered an ancillary issue, as opposed to a separate cause of action, is a different question. See supra note 79.
155. This should not be cause for disturbance. Even the Supreme Court has acknowledged that its focus on congressional intent "does not mean that we require evidence that Members of Congress . . . actually had in mind the creation of a private cause of action. The implied cause of action doctrine would be a virtual dead letter were it limited to correcting drafting errors when Congress simply forgot to codify its evident intention to provide a cause of action." Thompson v. Thompson, 484 U.S. 174, 179 (1988); see also Gabaldon, supra note 109, at 169-70 (1995) ("'[C]ongressional intent' will be taken to reference the objective conclusion regarding such intent that a reasonable observer would reach based on a review of all evidence legitimately taken into account.").
156. One should, perhaps, fault Congress for not considering such issues and expressing a clear intent regarding their resolution. It is interesting in this context that the Republican Party's Contract with America included a bill that would have required Congress to address these types of issues in the committee reports to every piece of legislation it enacted. See The Common Sense Legal Reforms Act of 1995, H.R. 10, 104th Cong., 1st Sess. § 106 (1995). While that may be desirable for implication, I have previously expressed my view that Congress should generally leave preemption determinations to the courts. Susan J. Stabile, Preemption of State Law by Federal Law: A Task for Congress or the Courts?, 40 VILL. L. REV. 1 (1995).
157. See Cannon v. University of Chicago, 441 U.S. 677, 694 (1979) ("[T]he legislative history of a statute that does not expressly create or deny a private remedy will typically be equally silent or ambiguous on the question" of whether to imply a cause of action.). There are, of course, exceptions to any rule. A House Committee Report on the Small Business Investment Incentive Act of 1980 stated: The Committee wishes to make plain that it expects the courts to imply private rights of action under this legislation, where the plaintiff falls within the class of persons protected by the statutory provision in question. Such a right would be consistent with and further Congress's intent in enacting that provision, and where such actions would not improperly occupy an area traditionally the concern of state law. H.R. REP. NO. 1341, 96th Cong., 2d Sess. 29 (1980), reprinted in 1980 U.S.C.CA.N. 4800, 4811. For an example of a case denying a private right of action because of explicit legislative history that Congress did not intend to allow one, see Jackson Transit Auth. v. Local Div. 1285, Amalgamated Transit Union, 457 U.S. 15 (1982). Less explicitly, in National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453 (1974), denying a private cause of action under the Amtrak Act, the Court pointed to legislative history indicating that the Secretary of Transportation and representatives of organized labor interpreted the Act as precluding private actions other than those specifically authorized therein. "Although the transcript of the House Committee hearings does not indicate that any Committee member voiced explicit affirmative agreement with this interpretation, it is surely most unlikely that the members of the Committee would have stood mute if they had disagreed with it" Id. at 460; see also Newcome v. Esrey, 862 F.2d 1099, 1105 (4th Cir. 1988) (suggesting there is legislative history evidencing the fact that Congress did not intend civil liability to attach to violations of § 17 of the Securities Act of 1933).
158. See Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 18 (1979) (Congress's failure to consider private remedy is not inevitably inconsistent with intent to make one available); W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS 221 (5th ed. 1984) (When legislators say nothing about a civil remedy, "they either did not have the civil suit in mind at all, or deliberately omitted to provide for it").
159. 501 U.S. 104, 108 (1991).
160. Id. (citations omitted); see also Thompson v. Thompson, 484 U.S. 174, 180 (1988) (considering as relevent to implication inquiry the peculiar status of custody orders under the full faith and credit doctrine at the time of passage of the Parental Kidnapping Prevention Act); California v. Sierra Club, 451 U.S. 287, 295 n.7 (1981) (accepting the use of contextual analysis but disagreeing with respondents conclusions about context); United States v. Wise, 370 U.S. 405, 411 (1962) (courts construe statutes with reference to the circumstances existing at the time the statute is enacted).
161. 29 U.S.C. § 1109(a) (1994).
162. Nonetheless, prior to the Supreme Court's decision in Mertens v. Hewitt Assoc., 113 S. Ct. 2063 (1993), several courts had held, based on traditional principles of trust law, that ERISA imposes liability on nonfiduciaries who particiate in a fiduciary's breach. See, e.g., Brock v. Hendershott, 840 F.2d 339, 342 (6th Cir. 1988); Lowen v. Tower Asset Management, Inc., 829 F.2d 1209, 1220-21 (2d Cir. 1987); Thornton v. Evans, 692 F.2d 1064, 1078 (7th Cir. 1982); Donovan v. Daugherty, 550 F. Supp. 390, 410-11 (S.D. Ala. 1982); Freund v. Marshall & Ilsley Bank, 485 F. Supp. 629, 641-42 (W.D. Wis. 1979).
163. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110-11 (1989).
164. See H.R. REP. NO. 533, 93d Cong., 2d Sess. (1974), reprinted in 1974 U.S.C.CA.N. 4639, 4649 (ERISA's fiduciary provisions codify principles developed in the law of trusts); H.R. REP. NO. 1280, 93d Cong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 5038, 5076 (ERISA is intended to apply rules and remedies similar to those available under trust law); S. REP. NO. 127, 93d Cong., 2d. Sess. (1974), reprinted in 1974 U.S.C.C.AN. 4838, 4865 (Congress intended to provide under ERISA the full range of legal and equitable remedies available under the common law of trusts); 120 Cong. Rec. S15,737 (daily ed. Aug. 22, 1974), reprinted in 1974 U.S.C.C.A.N. 5177, 5186 (statement of Sen. Williams) (ERISA's fiduciary provisions are intended to make applicable the law of trusts). White it is true that statements of legislative history have to be taken with a grain of salt, see infra note 236, it is clear from looking at the statute itself as well as the evidence surrounding its adoption that Congress enacted ERISA with the common law of trusts in mind.
165. See 3 AUSTIN W. SCOTT & WILLIAM F. FRATCHER, THE LAW OF TRUSTS § 224.1, at 404-05 (4th ed. 1988) (co-trustees); 4 id. § 326, at 291 (4th ed. 1988) (third parties);
166. GEORGE G. BOGERT & GEORGE T. BOGERT, THE LAW OF TRUSTS AND TRUSTEES § 868, at 104-09 (2d rev. ed. 1995) (describing bases and elements of third party liability for participation in a fiduciary breach).
167. In fact, when faced with the question, the Supreme Court suggested there is no cause of action against nonfiduciaries under ERISA, believing that the context evidence cut the other way in view of the fact that ERISA expressly specifies a cause of action against fiduciaries for participation in a cofiduciary's breach without specifying one for nonfiduciaries. See Mertens v. Hewitt Assocs., 113 S. Ct. 2063, 2071 (1993). A similar context argument was raised by the SEC as amicus curiae in Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994). In support of its argument that the Court should imply a cause of action for contribution under § 10(b) of the Exchange Act, the SEC argued that Congress enacted the Exchange Act with an understanding of general principles of tort law and that by 1934, aiding and abetting liability was well established in both civil and criminal actions. Id. at 1450 (citing SEC brief). The Court, however, disagreed with the SEC's reading of the history of aiding and abetting liability. Id. at 1450.
168. 15 U.S.C. § 77q(a) (1994).
169. 15 U.S.C. § 77p (1994); id. § 78bb(a) (1994); see Herman & McLean v. Huddleston, 459 U.S. 375, 383 (1983).
170. See California v. Sierra Club, 451 U.S. 287, 299-300 (1981) (Stevens, J., concurring) (the Congress that passed the Rivers and Harbors Appropriations Act of 1899 assumed that private parties would have a remedy for any injury suffered by reason of violation of the statute because at the time implication of private causes of action was a well-known practice at common law and in the courts).
171. Courts applying the context canon of interpretation generally assume that Congress is aware of Supreme Court decisions. See, e.g., Cannon v. University of Chicago, 441 U.S. 677, 696-97 (1979) ("It is always appropriate to assume that our elected representatives, like other citizens, know the law . . . ."); Siebert v. Conservative Party, 724 F.2d 334, 337 (2d Cir. 1983) ("Congress is presumed to be aware of the judicial background against which it legislates."), cert. denied, 466 U.S. 980 (1984).
172. 456 U.S. 353 (1982).
173. Id. at 379.
174. Id.
175. Id. at 381, 387; see also Herman & McLean v. Huddleston, 459 U.S. 375, 384-86 (1983) (subsequent amendments to the Exchange Act which did not address a § 10(b) cause of action suggested Congress's ratification of the cause of action); Piper v. Chris-Craft Indus., 430 U.S. 1, 55 n.4 (1977) (Stevens, J., dissenting) ("Although originally one might have argued that the private remedies created by the Securities Acts are limited to those expressly described in the legislation itself, history has foreclosed any such argument today. The statutes originally enacted in 1933 and 1934 have been amended so often with full congressional awareness of the judicial interpretation of Rule 10b-5 as implicitly creating a private remedy that we must now assume that Congress intended to create rights for the specific beneficiaries of the legislation as well as duties to be policed by the SEC.").
176. 441 U.S. 677 (1979).
177. Id. at 680.
178. Id. at 693. Section 601 of the Civil Rights Act of 1964 provides that "[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." 42 U.S.C. § 2000d (1994). Title IX provides that "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any educational program or activity receiving Federal financial assistance . . . ." 20 U.S.C. § 1681(a) (1994).
179. See Guardians Ass'n v. Civil Serv. Comm'n, 463 U.S. 582 (1983); NAACP v. Medical Ctr., Inc., 599 F.2d 1247 (3d Cir. 1979); Lau v. Nichols, 414 U.S. 563 (1974) (each finding an implied private right of action under Title VI of the Civil Rights Act).
180. Cannon v. University of Chicago, 441 U.S. 677, 711 (1979). The Court also noted that, in Allen v. State Board of Elections, 393 U.S. 544 (1969), the Court had "interpreted comparable language in § 5 of the Voting Rights Act as sufficient to authorize a private remedy." Id. at 698 (footnote omitted).
181. Cannon, 441 U.S. at 696. As Justice Rehnquist noted in his concurring opinion, during the period of the enactment of the several Titles of the Civil Rights Act, Congress tended to rely to a large extent upon the courts to decide whether there should be a private right of action, rather than determining this question for itself, and that the Supreme Court's decisions gave Congress good reason to think the courts would handle the issue. Id. at 718 (Rehnquist, J., concurring).
182. Id. at 699; see also Stepanischen v. Merchants Dispatch Transp. Corp., 722 F.2d 922, 924-26 (1st Cir. 1983) (fact that Congress amended § 2 of the Railway Labor Act without withdrawing private right of action granted by the courts thereunder indicates that Congress did not intend the criminal sanctions of the Act to be exclusive). But see Health Care Plan, Inc. v. Aetna Life Ins., 966 F.2d 738, 741-42 (2d Cir. 1992) (suggesting that Curran and Cannon support only a limited application of the context canon). The Court has also used context analysis to decline to find an implied cause of action. See T.I.M.E. Inc. v. United States, 359 U.S. 464, 474 (1959) (declining to imply a private cause of action under the Motor Carrier Act of 1935, suggesting it did "not think that Congress, which we cannot assume was unaware of the holding of the Abilene case that a common-law right of action to recover unreasonable common carrier charges is incompatible with a statutory scheme in which the courts have no authority to adjudicate the primary question in issue, intended by the savings clause of § 216(j) to sanction a procedure such as that here proposed").
183. 304 U.S. 64 (1938).
184. See Wheeldin v. Wheeler, 373 U.S. 647, 651 (1963) (refusing to imply a private federal remedy for abuse of subpoena power from a statute granting power to issue subpoenas, noting that "we are not in the free-wheeling days antedating Erie").
185. See supra note 27.
186. This is not inconsistent with the previously expressed notion that the federal court's authority to make federal common law provides a source of power to imply causes of action from all federal statutes, since the existence of the federal statute creates the necessary federal interest. Here we are talking about ascertaining Congress's intent by context and about the conclusion Congress would draw from a more activist federal judiciary as opposed to one operating post-Erie:
187. Compare Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994) and Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633 (1990) (not accepting adoption by silence) with Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992) and Herman & MacLean v. Huddleston, 459 U.S. 375, 384-86 (1983) and Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353 (1982) and Flood v. Kuhn, 407 U.S. 258 (1972) (accepting adoption by silence).
188. See supra text accompanying notes 156-59.
189. 503 U.S. 60 (1992).
190. Id. at 71-73; cf. United States v. Rutherford, 442 U.S. 544, 554 n.10 (1979) (Congress's failure to alter an agency's statutory construction when it has amended a statute in other respects indicates acquiescence in the agency interpretation).
191. See Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994) (rejecting the notion that Congress's amendments to the securities laws subsequent to court decisions recognizing an implied action for aiding and abetting without saying that such an action was not available are evidence that Congress has acquiesced in the judicial interpretations).
192. Id. at 1452-53; see Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 650 (1990) ("Congressional inaction lacks 'persuasive significance' because 'several equally tenable inferences' may be drawn from such inaction, 'including the inference that the existing legislation already incorporated the offered change.'") (quoting United States v. Price, 361 U.S. 304, 313 (1960)); Patterson v. McLean Credit Union, 491 U.S. 164, 175 n.1 (1989) (dangerous to place "undue reliance on the concept of congressional ratification").
193. Musick, Peeler & Garrett v. Employers Ins., 113 S. Ct. 2085, 2090-91 (1993).
194. 15 U.S.C. § 78t-1 (1988).
195. Id. § 78t-1(d) (Supp. V 1993).
196. See Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (1991).
197. 15 U.S.C. § 78aa-1(a) (Supp. V 1993).
198. In Central Bank, the Court rejected the notion of acquiescence by silence, despite the fact that the amicus curiae brief filed by the Securities and Exchange Commission discussed various congressional hearings and securities law amendments indicating that Congress knew about and approved of the existence of implied aiding and abetting liability. See supra note 176; Brief of Amicus Curiae for the Securities and Exchange Commission at 14, Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994) (No. 92-854). The brief cited, for example, a House Report endorsing judicial application of aiding and abetting to achieve the remedial purpose of the securities laws. H.R. REP. NO. 355, 98th Cong., 2d Sess. 10 (1983). This evidence provides something more than silence and should have been given more weight by the Supreme Court. See also National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453, 460-61 (1974) (finding deliberate failure of House Committee to adopt a proposal to explicitly permit private cause of action to enforce the Amtrak Act, after the Committee learned of the view of the Secretary of Transportation opposing such an action, as supporting the conclusion that the Committee agreed that the statutory language enacted was not intended to create a private cause of action except in very limited circumstances).
199. 359 U.S. 464 (1959).
200. Id. at 468; see also Karahalios v. National Fed'n of Fed. Employees, Local 1263, 489 U.S. 527, 529 (1989) (no private causes of action under the Civil Service Reform Act because exclusive enforcement authority thereunder is vested in the Federal Labor Relations Authority with judicial review available of the agency's determinations). However, the mere fact that a statute expressly provides only for criminal penalties enforceable solely by the Attorney General will not preclude implying a cause of action. See, e.g., Stepanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, 926-27 (1st Cir. 1983).
201. See supra note 127. In contrast, a court may decide that the absence of any available administrative remedy is a reason to allow for judicial enforcement of a claim. See, e.g., Steele v. Louisville & Nashville R.R., 323 U.S. 192, 206-07 (1944) (allowing a private right of action under the Railway Labor Act because no mode of administrative enforcement is available). The Supreme Court has also viewed a comprehensive statutory scheme to preclude a § 1983 remedy for stautory violation and a Bivens direct constitutional action. See Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1, 19-20 (1981) (precluding a § 1983 remedy); Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 28 (1981) (precluding a § 1983 remedy); Brown v. General Serv. Admin., 425 U.S. 820, 834 (1976) (precluding a Bivens claim).
202. See supra cases cited in note 127.
203. See supra note 128; Wyandotte Transp. Co. v. United States, 389 U.S. 191, 200-01 (1967) (the existence of certain statutory remedies did not indicate a congressional intent to preclude the implication of additional remedies in favor of the government).
204. 29 U.S.C. § 793 (1988).
205. See Rogers v. Frito-Lay, Inc., 611 F.2d 1074 (5th Cir.), cert. denied, 449 U.S. 889 (1980).
206. Mertens v. Hewitt Assocs., 113 S. Ct. 2063, 2066 (1993) (quoting Nachman Corp. v. PBGC, 446 U.S. 359, 361 (1980)).
207. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985).
208. Id. (emphasis omitted).
209. See id. at 148; Bucklet Dement, Inc. v. Travelers Plan Adm'r, 39 F.3d 784, 788 (7th Cir. 1994) (§ 502(a)(3) of ERISA does not allow for compensatory damages); Howe v. Varity Corp., 36 F.3d 746, 752 (8th Cir. 1994) (disallowing punitive damages under ERISA), cert. granted, 115 S. Ct. 1792 (1995); Goodman v. S & A Restaurant Corp., 756 F. Supp. 966 (S.D. Miss. 1990) (neither compensatory nor punitive damages are recoverable under ERISA).
210. See 29 U.S.C. §§ 1002(21)(A), 1102(a) (1988).
211. 29 U.S.C. § 1104 (1988 & Supp. V 1993).
212. 29 U.S.C. § 1109(a) (1994).
213. Id.
214. 29 U.S.C. § 1132 (a) (2) (1988).
215. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985).
216. See Mertens v. Hewitt Assocs., 113 S. Ct. 2063, 2071 (1993) (suggesting that Congress did not intend for courts to imply an action against nonfiduciaries under ERISA). Indicators of intent may point in different directions. Although this factor suggests a comprehensive intent against such a cause of action, as the discussion in Section VI illustrates, the weight of intent factors favors allowing a claim against nonfiduciaries under ERISA.
217. This substantive regulation includes rules relating to vesting and accrual of benefits, requirements for funding of pension plans and the creation of a system of pension insurance. See 29 U.S.C. §§ 1051-1086, 1301-1453 (1988 & Supp. V 1993).
218. 29 U.S.C. §§ 1021-1031, 1101-1114 (1988 & Supp. V 1993).
219. 29 U.S.C. § 1002(1) (1988).
220. Given the breadth of ERISA's preemption provision, absence of a federal cause of action means essentially no regulation of welfare plans. See Stabile, supra note 141, at 31-35.
221. See 120 CONG. REC. 29,942 (1974) (statement of Sen. Javits) ("It is . . . intended that a body of Federal substantive law will be developed by the courts to deal with issues involving rights and obligations under private welfare and pension plans."); H.R. CONF. REP. NO. 386, 101st Cong., 1st Sess 433 (1989), Sprinted in 1989 U.S.C.C.A.N. 3018, 3036 ("It remains the intent of Congress that the courts use their power to fashion legal and equitable remedies that not only protect participants and beneficiaries but deter violations of the law as well."). From this language, courts have concluded that Congress intended that the courts develop a "federal common law of rights and obligations under ERISA-regulated plans." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989) (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987)); see Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 156 (1985).
222. 862 F.2d 1099 (4th Cir. 1988).
223. Id. at 1104.
224. Id. (citing Cannon v. University of Chicago, 441 U.S. 677, 711(1979)).
225. Id. at 1104.
226. 664 F.2d 680 (8th Cir. 1981).
227. 15 U.S.C. § 1674 (1994).
228. McCabe, 664 F.2d at 682.
229. 114 S. Ct. 1439 (1994).
230. Id. at 1456 (Stevens, J., dissenting).
231. Id. at 1448-49 (making reference to §§ 9, 16,18 and 20A of the Exchange Act and to §§ 11 and 12 of the Securities Act of 1933).
232. Id. at 1451.
233. See Musick, Peeler, & Garrett v. Employers Ins., 113 S. Ct. 2085, 2086 (1993) (citing 15 U.S.C. §§ 78i(e), 78r(b) (1988)).
234. Id. at 2090.
235. The notion of especial benefit was the first factor in the Cort v. Ash four-part test for implication. In Cort, the factor was expressed as an element in its own right, not something that was merely an indicator of Congress's intent. And some would argue that that is how the factor should be viewed, suggesting that if a statute explicitly confers a right directly upon a class of persons, that is enough to justify creation of an implied cause of action, without evidence of intent. Cort v. Ash, 422 U.S. 66 (1975); see Mazzuchi, supra note 74, at 1089 ("Where the terms of a statute clearly commit the state to act for the benefit of a plaintiff . . . , some level of enforcement is necessary simply as a matter of fairness and the rule of law."). Courts subsequent to Cort, however, have treated the issue of especial benefit as merely something that provides evidence of congressional intent. See supra text accompanying notes 53-56.
236. 422 U.S. 66 (1975).
237. See, e.g., Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 238 (1969) (implying equitable remedy under § 1982 of the Civil Rights Act of 1964); Allen v. State Bd. of Elections, 393 U.S. 544, 554-55 (1969) (implying private right of action under the Voting Rights Act of 1965); Tunstall v. Brotherhood of Locomotive Firemen & Enginemen, 323 U.S. 210, 213 (1944) (implying private right of action under the Railway Labor Act); Virginian Ry. v. System Fed n No. 40, 300 U.S. 515, 545 (1937) (same).
238. See, e.g., Piper v. Chris-Craft Indus., 430 U.S. 1, 42 (1977) (no implied private right of action because tender offerers are not within the intended class of beneficiaries of § 14(e) of the Exchange Act); Cort v. Ash, 422 U.S. 66, 79-80 (1975) (refusing to imply a private right of action under § 610 of the Federal Election Campaign Act because the statute is a criminal one not intended to benefit any particular group); National R.R. Passenger Corp. v. National Ass'n of R.R. Passengers, 414 U.S. 453, 462-64 (1974) (refusing to imply a private right of action under § 307(a) of the Railway Passenger Service Act of 1970 because the Act only creates a public cause of action maintainable by the Attorney General). But see J. I. Case Co. v. Borak, 377 U.S. 426, 430-31 (1964) (implying a private right of action under § 14(a) of the Exchange Act based on broad remedial power of the courts). While the Supreme Court has usually been unwilling to imply a private cause of action in the case of a statute designed to benefit the public at large, it has implied causes of action in favor of the government in such cases. See, e.g., Wyandotte Transp. Co. v. United States, 389 U.S. 191, 200-03 (1967) (finding the government to be the intended beneficiary of the Rivers and Harbors Act of 1899 and therefore able to bring an implied cause of action under the Act).
239. See Kissinger v. Reporters Comm. for Freedom of the Press, 445 U.S. 136, 149-50 (1980) (denying a private cause of action under the Federal Records Act and the Records Disposal Act on the ground that the legislative history of both Acts reveals that their purpose was to benefit the agencies themselves and the Federal Government as a whole).
240. The Court has, at various times, used an argument of necessity to achieve congressional purpose as a basis to imply a private cause of action. It has not, however, spoken of such argument as indicative of congressional intent. See Piper, 430 U.S. at 25 ("Once we identify the legislative purpose, we must then determine whether the creation . . . of the implied cause of action ... is necessary to effectuate Congress's goals."); Cort, 422 U.S. at 84 (noting that "it is the duty of the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose") (quoting J. I. Case, 377 U.S. at 433). Necessity has value both as an indicator of intent and in its own right. That is, for example, even if Congress did not intend a private cause of action, the need for such an action to achieve Congress's purpose would be a factor in favor of implication.
241. This raises the issue of whether preemption of state law claims should be part of the analysis of congressional intent. Preemption generally has not affected courts' analyses. See, e.g., Mertens v. Hewitt Assocs., 113 S. Ct. 2063 (1993) (suggesting that the likelihood that a claim would be preempted under state law is not relevant to the question whether a federal cause of action exists); Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1 (1981) (holding that there is no implied right of action even where the Federal Water Pollution Control Act fully preempted the common law of nuisance in the area of water pollution); Statland v. American Airlines, 998 F.2d 539 (7th Cir.) (refusing to imply a cause of action in favor of a passenger to challenge federal tax withholding on cancelled ticket despite preemption of state law claim to recover withheld amounts), cert. denied, 114 S. Ct. 603 (1993). Assuming Congress knows a state law claim will be preempted, and assuming Congress intends that there be some remedy for acts which violate federal law, it is reasonable to assume that its knowledge of preemption is some indication of an intent to allow implication of a federal cause of action. Whether in fact Congress knows that courts will preempt a state law claim may depend upon whether or not the statute in question has an express preemption provision, as well as the predictability of whether courts will preempt the the claim in question.
242. 393 U.S. 544 (1969).
243. The plaintiffs in Allen sought a declaratory judgment that certain state law voting amendments were subject to § 5 of the Voting Rights Act, with the result that the amendments could not be enforced until the State complied with the approval process set forth in § 5. Id. at 548.
244. Id. at 556. 42 U.S.C. § 1973j provides that the Attorney General may institute an action or may file an applicaton for an order enforcing the Voting Rights Act. 42 U.S.C. §§ 1973j(d), (e) (1988).
245. Allen, 393 U.S. at 556.
246. Id. at 556-57.
247. 568 F.2d 862, 874 (2d Cir. 1977).
248. 15 U.S.C. § 80b-6 (1994).
249. Abrahamson, 568 F.2d at 874. A similar question, the necessity of a right of action by the SEC, wAed ta Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994). Although the Supreme Court only expressly held that there is no private right of action for aiding and abetting a § 10(b) violation, its reasoning would equally support disallowing SEC actions based on § 10(b) aiding and abetting. See id. at 1459-60 (Stevens, J., dissenting). Justice Stevens' dissenting opinion expressed concern about the impact of the majority's opinion on SEC enforcement of the Exchanse Act, citing the view of the SEC that elimination of aiding and abetting liability would "'sharply diminish the effectiveness of Commission actions." Id. at 1460 n.11 (Stevens, J., dissentins) (quoting Brief for the SEC as Amicus Curiae at 18 n.15). If, in fact, the SEC's ability to bring aiding and abetting claims were necessary for it to effectively combat fraud in the purchase and sale of securities, that would be a compelling argument in favor of concluding that Congresss intended to allow for such a claim. However, as even the SEC has conceded, Central Bank may not have a significant effect on its enforcement action. See Abandonment of the Private Right of Action for Aiding and Abetting Securities Fraud/Staff Report on Private Securities Litigation: Hearings Before the Subcomm. on Securities of the Sen. Comm. on Banking, Housing & Urban Affairs, 103d Cong., 2d Sess. 13, 14 (1994) (testimony of Arthur Levitt, Chairman, SEC);
250. see also S. Scott Luton, The Ebb and Flow of Section 10(b) Jurisprudence: An Analysis of Central Bank, 17 U. ARK. LITTLE ROCK L.J. 45, 66-69 (1994) (discussing other options available to the SEC);
251. Lisa K. Wager & John E. Failla, Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. - The Beginning of an End, or Will Less Lead to More?, 49 BUS. LAW. 1451, 1455-56 (1994) (noting that Central Bank is likely to lead to attempts at expanding primary liability under § 10(b)).
252. See, e.g., Universities Research Ass'n v. Coutu, 450 U.S. 754, 782-84 (1981) (underlying purpose of Davis-Bacon Act indicates that Congress did not intend to create a private right of action); Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 420-23 (1975) (implied private cause of action is not necessary to further the purpose of the Securities Investor Protection Act since Congress has already created the Securities Investor Protection Corporation to protect investors); National R.R. Passenger Corp. v National Ass'n of R.R. Passengers, 414 U.S. 453, 458-65 (1974) (denying plaintiff private cause of action where such action was unsupported by any legislative history as to the Act's purpose).
253. See WILLIAM N. ESKRIDCE, JR., DYNAMIC STATUTORY INTERPRETATION 14-25 (1994). Professor Eskridge suggests that Congress's actual intent is unknowable: [L]egislators usually do not have a specific intention on more than a few issues . . . in any bill for which they vote; even if they do have a specific intention, that intention is not likely to be recorded; and, even if some statement of intent is recorded on behalf of an individual Senator or Representative, it is impossible to know whether the statement is a reliable indicator of that person's intent or was an instance of strategic behavior on the part of that person. Id. at 16-18. Professor Eskridge is similarly unimpressed with the use of conventional intent, by which term he means the notion that what the sponsor of a piece of legislation or a committee says is a meaningful indication of the intent of Congress as a whole. Not only does conventional intent suffer from the same problem of the impossibility of distinguishing strategic behavior that actual intent analysis suffers, but one cannot presume that a sponsor or committee member speaks for Congress as a whole. Id. at 18-21. Professor Eskridge also suggests that any attempt to define Congress's intent by reference to the views of "'pivotal' players" in a statute's passage is doomed to fail because one cannot later ascertain which players were in fact pivotal. Id. at 22;
254. see also McNollgast, Positive Canons: The Role of Legislative Bargains in Statutory Interpretation, 80 GEO. L.J. 705, 732 (1992) ("There is no obvious relationship between what the ardent supporter of the legislation wishes to see . . . and what the pivotal players will support."). Such criticisms suggest that evidence of congressional intent based on statement contained in a statute's legislative history should be judged carefully and not given disproportionate weight compared to other means of ascertaining intent.
255. ESKRIDCE, supra note 235, at 26 (quoting HENRY M. HART & ALBERT M. SACKS, THE LEGAL PROCESS: BASIC PROBLEMS IN THE MAKING AND APPLICATION OF LAWS 145 (1958)).
256. See BATOR ET AL., supra note 113, at 944 ("[A] statute is often the product of a pitched battle between competing interest groups, and one outcome of that battle may well have been a tacit understanding that the available remedies would be limited - that full compliance was neither desired nor desirable."); see also RICHARD A. POSNER, THE FEDERAL COURTS: CRISIS AND REFORM 271-72 (1985) (noting that implying a private cause of action may effectively "upset the compromise" reached by competing interest groups).
257. The intent of Congress is more relevant in determining whether to imply a cause of action than in deciding whether federal legislation preempts state law. This is so for two reasons. First, preemption involves questions of both state and federal law since the question in preemption cases is whether a state cause of action should supplement a federal one or be disallowed. Therefore, preemption inquiries involve both federal interests and state interests. In implied cause of action cases, the question is whether to supplant a federal statute with a federal remedy. To be sure, federalism considerations will come into play in deciding whether to imply a private cause of action. However, the primary interplay in implication cases is between Congress and the courts, and the consequence of deciding to imply a federal cause of action is not to displace a state cause of action. Given that more limited scope, Congress's intent is more relevant, although not dispositive. Second, and perhaps more important, with preemption, it is difficult for Congress to predict all the circumstances that may arise at the time it enacts a statute. See Stabile, supra note 141 at 30-37. Implication is easier, since the only question Congress has to consider is the means of enforcement of the federal statute.
258. Once it is acknowledged that implication questions may not involve an actual, explicit expression of congressional intent (see supra text accompanying notes 140-43), and that courts must analyze indirect factors such as those identified in the text, the question arises whether there is a significant difference between phrasing these factors in terms of congressional intent or merely as factors in their own rights. I believe the answer to be yes, that there are differences between these indirect indicators of intent and the other factors discussed in Part IV. The indirect indicators attempt to decide the issue in a manner believed to be consistent with what Congress would have intended if it had thought about the implication issue. This serves as a constraint on too free-wheeling an approach to implication.
259. See Creswell, supra note 105, at 986 ("'American courts have no intelligible, generally accepted, and consistently applied theory of statutory interpretation.'") (citing HENRY M. HART S: ALBERT M. SACKS, THE LEGAL PROCESS: BASIC PROBLEMS IN THE MAKING AND APPLICATION OF LAWS 1201 (1958)).
260. See id. The thought is that if Congress clearly wanted a private cause of action, it would have provided for one. Id.
261. The fact that they are only guides supports the earlier conclusion that congressional intent should not be the sole factor in deciding implication questions.
262. I want to emphasize that implication decisions should never be made solely on the basis of intent Regardless of the strength of the intent factors, a court should always look to the other factors identified in Part IV before making a final determination as to whether to imply a private right of action.
263. This point was earlier phrased as an analysis of a set of factors, one of which may or may not be congressional intent. However, the foregoing discussion makes it clear that despite the limits on congressional intent analysis, it goes too far to say such intent can be ignored altogether. Hence, the rephrasing of that spectrum point.
264. As was suggested earlier, this issue also is relevant as part of the analysis of indirect sources of congressional intent. See supra text accompanying notes 225-33. The question of an adequate state remedy may be useful as evidence of congressional intent and also important as a factor separate from congressional intent. For example, one may determine that Congress did not intend to create a private cause of action despite the absence of state remedy, but still think courts should consider the absence of a state remedy in deciding whether to imply a private cause of action despite the absence of congressional intent.
265. See Donovan v. Occupational Safety & Health Rev. Comm'n, 713 F.2d 918, 926 (2d Cir. 1983) (citing Marshall v. Occupational Safety & Health Rev. Comm'n, 635 F.2d 544, 550-51 (6th Cir. 1980)); Taylor v. Brighton Corp., 616 F.2d 256 (6th Cir. 1980). There are also examples where courts have refused to imply a private cause of action from other federal statutes because of adequate state remedies. See, e.g., District of Columbia v. Schramm, 631 F.2d 854, 863 (D.C. Cir. 1980) (finding that a private cause of action should not be implied under the Clean Water Act because adequate state remedies exist); Sacks v. Reynolds Sec., Inc., 593 F.2d 1234, 1245 (D.C. Cir. 1978) ("Expansive implication of federal liability would displace adequate common law actions and undermine a state court's power to apply traditional remedies.").
266. For example, courts allow implied federal securities causes of action despite state fraud and corporate law claims. See Goldberg v. Meridor, 567 F.2d 209 (2d Cir.) (existence of a state corporate law remedy does not in and of itself preclude a private 10b-5 damage claim), cert. denied, 434 U.S. 1069 (1977).
267. Similarly, if the defendant is acting under color of state law and a § 1983 claim is available to a plaintiff, there is less need to imply a cause of action in the plaintiffs favor.
268. 459 U.S. 375 (1983).
269. Id. at 377.
270. Id. at 386 n.22. The Court was also motivated by the broad remedial purposes of the securities laws, in view of which the Court has "repeatedly recognized that securities laws combatting fraud should be construed 'not technically and restrictively, but flexibly to effectuate [their] remedial purposes.'" Id. at 386-87 (quoting SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 195 (1963)).
271. 113 S. Ct. 2063 (1993)
272. See 29 U.S.C. § 1144(a) (1994).
273. Mertens, 113 S. Ct. at 2074 (1993) (White, J., dissenting). For a recitation of examples of ways in which the unscrupulous will be able to seek illegal gain as a result of the Mertens dicta, see Elaine M. Darroch, Mertens v. Hewitt Associates: The Supreme Court's Dismantling of Civil Enforcement Under ERISA, 1994 DET. C.L. REV. 1089, 1105-06.
274. When the issue is whether to imply an additional remedy from a statute, this factor involves the question whether the remedies expressly provided are adequate. In Wyandotte Transp. Co. v. United States, 389 U.S. 191, 202 (1967), the Supreme Court found that a damages action in favor of the government under the Rivers and Harbors Act of 1899 was necessary: the combination of the criminal fines provided for by the statute and the government's in rem rights would not serve to reimburse the government for its expense in removing a sunken barge.
275. 942 F.2d 376 (6th Cir. 1991).
276. 29 U.S.C. § 1553(b) (1994).
277. AFSCME, 942 F.2d at 377.
278. Id. at 380.
279. Id. There was no allegation that the Labor Department was unable to provide relief.
280. This is distinct from situations where lack of agency enforcement results from a deliberate decision by an agency not to act. In such cases, courts should not necessarily merely substitute their judgment for the judgment of the agency.
281. See, e.g., Allen v. State Bd. of Elections, 393 U.S. 544, 556 (1969) (Attorney General's inability to enforce all claims suggests necessity of private cause of action); Haskins v. Stanton, 794 F.2d 1273, 1276 (7th Cir. 1986) (noting that the administrative hearings provided for in the Food Stamp Act do nothing to redress violations of the act that prevent applicants from obtaining timely decision in their initial food stamp application); Howard v. Pierce, 738 F.2d 722, 729 (6th Cir. 1984) (private right of action under the Brooke Amendment to the United States Housing Act of 1937 necessary because, inter alia, regulations enacted by the Department of Housing and Urban Development undermine the effectiveness of the Brooke Amendment's primary feature); Stephen E. Ronfeldt, Implying Rights of Action for Minorities and the Poor through Presumptions of Legislative Intent, 34 HASTINGS L.J. 969, 1002 (1983) (noting that the Supreme Court has allowed implied private causes of action where the regulatory scheme would be inadequate by itself). Federal antitrust laws, which do confer express private rights of action, see 15 U.S.C. §§ 15, 26 (1994), are an example of an area in which private enforcement has always been viewed to be a necessary supplement to agency enforcement.
282. See, e.g., Michelle L. Dunaj, Note, Monfort of Colorado, Inc. v. Cargill, Inc.: Standing to Enjoin Horizontal Mergers by Competing Companies, 41 U. MIAMI L. REV. 385, 391 (1986) (expressing the fear that leaving antitrust enforcement solely in the hands of the government could result in meritorious cases not being brought);
283. Elizabeth M. Kurr, Note, Granting Divestiture to Private Parties as a Remedy for Anticompetitive Mergers After California v. American Stores Co., 26 U.S.F. L. REV. 319, 340 n.198 (1992) (demonstrating that the larger percentage of antitrust enforcement is by private enforcement);
284. Mark Taylor, Note, A Proposal to Prohibit Industrial Relocation Subsidies, 72 TEX. L. REV. 669, 705 n.230 (1994) (noting that "[d]uring the Reagan Administration, the Justice Department relied heavily upon private enforcement of the antitrust laws").
285. Cf. Sunstein, supra note 70, at 428-30 (suggesting that a statutory standard that is open-ended and furnishes only a vague or ambiguous standard for lawful conduct should preempt a § 1983 remedy for violation of that statute).
286. See Santa Fe Indus, v. Green, 430 U.S. 462, 477 (1977).
287. Indeed, Central Bank came to the Supreme Court because of disagreement in the lower federal courts as to the standard for imposing liability on aiders and abetters of securities violations. Central Bank v. First Interstate Bank, 114 S. Ct. 1439, 1444 (1994).
288. This is related to the first factor, but it is different. The focus in the first factor is with the plaintiff; here the concern is with the state and the value of our federal system of government.
289. This view was expressed by the Supreme Court in Cort v. Ash, 422 U.S. 66, 78 (1975). In Cort, the Court decided that the use of corporate funds in violation of federal law could also give rise to a cause of action under state law for breach of fiduciary duty and for the taking of an ultra vires action. Id. at 84-85. On the other hand, since corporations are creatures of state law, if state law were to permit corporations to use corporate funds as contributions to elections, the Court would be reluctant to imply a federal right to recover funds used in violation of a federal statute. Id. Although Cort viewed federalism as a factor in its own right, in at least one subsequent opinion, the Supreme Court listed federalism as one of the indicators of congressional intent. See Daily Income Fund, Inc. v. Fox, 464 U.S. 523, 536 (1984).
290. Moore v. Chesapeake & Ohio Ry., 291 U.S. 205 (1934) (overturning Texas & Pac. Ry. v. Rigsby, 241 U.S. 33 (1916)); see Crane v. Cedar Rapids & Iowa City Ry., 395 U.S. 164 (1969); see also Piper v. Chris-Craft Indus., 430 U.S. 1, 4041 (1977) (despite pervasiveness of federal securites regulation, federalism factor supported decision to not imply cause of action under the Williams Act in favor of an unsuccessful tender offerer because the complained of action would give rise to a cause of action under common-law principles of interference with a prospective commercial advantage); Smith v. Dearborn Finan. Serv., Inc., 982 F.2d 976, 980 (6th Cir. 1993) (declining to imply a private cause of action under the Federal Credit Union Act in part on the grounds that insurance is an area traditionally regulated by state law); Zajac v. Federal Land Bank, 909 F.2d 1181, 1183 (8th Cir. 1990) (declining to imply a private cause of action of foreclosure under the Agricultural Credit Act in part because foreclosure is an area traditionally controlled by state law); Cedar-Riverside Assoc. v. City of Minneapolis, 606 F.2d 254, 258 (8th Cir. 1979) (refusing to imply a private cause of action under the Housing Act of 1949 in part because the cause of action involved was traditionally relegated to state law of interference with contractual relations); Chesapeake Bay Found, v. Virginia State Water Control Bd., 501 F. Supp. 821, 826 (E.D. Va. 1980) (rejecting a § 1983 action under the Federal Water Pollution Control Act based in part on the federalism concerns raised).
291. 430 U.S. 462 (1977).
292. Id. at 478.
293. Id. at 479 n.16; see Thomas L. Hazen, Corporate Chartering and the Securities Markets: Shareholder Suffrage, Corporate Responsibility and Managerial Accountability, 1978 WIS. L. REV. 391, 416 (suggesting that those who criticize results of cases like Santa Fe are merely advocating "continued confusion of the respective roles of the corporate chartering statutes and securities legislation"). Professor Hazen's article discusses implication in the context of the securities laws generally and at the end includes a helpful chart setting out express and implied civil liabilities under the various securities laws. Id. at 438-39.
294. 442 U.S. 560, 575-76 (1979). Nevertheless, there have been Supreme Court decisions after Touche Ross which denied implied private causes of action mainly because they involved issues traditionally within the purview of state law. See Thompson v. Thompson, 484 U.S. 174, 186 (1988) (declining to find an implied private cause of action under the Parental Kidnapping Prevention Act, noting that the Court should not become entangled in traditional state law questions that they presumably have little expertise to resolve); Jackson Transit Auth. v. Local Div. 1285, Amalgamated Transit Union, 457 U.S. 15, 24 (1982) (holding that Congress, in enacting § 13 of the Urban Mass Transit Act, intended that State law would control local transit labor relations). The Supreme Court's recent decision in United States v. Lopez, 115 S. Ct. 1624 (1995), which held that the Gun-Free School Zones Act of 1990 violates Congress's Commerce Clause authority, may reflect a more expansive view by the Court of the role of federal courts in questions of federalism. Justice Kennedy's separate concurring opinion particularly suggests that courts have an important role in preserving the balance between federal and state power. See id. at 1638 (Kennedy, J., concurring).
295. Professor Creswell, however, rejects courts' use of federalism as a factor in deciding implication cases, taking the position that it is for Congress to decide both whether there should be a federal rule of law in an area that has been traditionally relegated to the states and whether, in fact, an area has been traditionally relegated to the states. He believes determination by Congress is necessary to safeguard the federalist nature of government because Congress is politically responsible and the states are actually represented in the Senate. See Creswell, supra note 105, at 995. The problem with Professor Creswell's argument is that the courts' use of federalism as a factor in implication analysis will act to protect the states from undue encroachment by the federal government. If the courts did not factor federalism considerations into their implication analysis, they might decide to imply a federal cause of action in an area traditionally within the province of state law. It may or may not be the case that it would be ideal for Congress to make federalism determinations as a general matter. However, the only way such considerations will come into play in implication cases is for the courts to consider them.
296. The Court has often been unwilling to consider whether the purpose of a statute would be advanced by judicial implication of a private cause of action once it concludes that there is no evidence of congressional intent that such an action be implied. See California v. Sierra Club, 451 U.S. 287, 298 (1981).
297. Theoretically, it is possible that the intent and other factors in each direction are completely balanced. I do not believe that would ever be the case in reality. However, the theoretical possibility requires a presumption to tip the balance. Based on the desire to provide a remedy where a right exists, I would argue for allowing implication where all factors are in balance. However, I acknowledge that there are arguments for a presumption in the other direction.
298. 113 S. Ct. 2063 (1993).
299. Id. at 2065.
300. Id. at 2066-71.
301. Id. at 2067.
302. 114 S. Ct. 1439 (1994).
303. Id. at 1447.
304. See supra text accompanying notes 190-200.
305. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985).
306. 29 U.S.C. § 1105(a) (1994).
307. See supra note 205.
308. See supra note 149-51.
309. See supra note 150 and accompanying text. The Supreme Court viewed the fact that knowing participation liability for nonfiduciaries was well established as arguing against nonfiduciary liability, given that ERISA says nothing about knowing participation liability of nonfiduciaries, yet expressly provides for knowing participation liability of cofiduciaries. Mertens v. Hewitt Assocs., Inc., 113 S. Ct. 2063, 2067 (1993); see 29 U.S.C. § 1105(a) (1994). It is, however, more likely that Congress did not actually think about the question of nonfiduciary liability, since so much of its focus in the statute is on the behavior of fiduciaries.
310. See supra note 33 and accompanying text.
311. With certain exceptions, ERISA preempts any state law claim that "relates to" an employee benefit plan. 29 U.S.C. § 1144(a) (1994). As Justice White's dissenting opinion in Mertens points out, a claim against a nonfiduciary for participating in a breach of ERISA assuredly relates to an employee benefit plan. Mertens, 113 S. Ct. at 2074 n.2 (White, J., dissenting).
312. The basic congressional policy "to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries" is set forth in § 1 of ERISA 29 U.S.C. § 1001(b) (1994); see Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90(1983) (basic goal of ERISA is to "promote the interests of employees and their beneficiaries in employee benefit plans") (citing Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361-62 (1980)).
313. 29 U.S.C. § 1132(a) (1994).
314. The plan beneficiaries in these cases do have a claim against the plan fiduciary for breaches of ERISA's fiduciary duty provisions, so they are not completely without a cause of action against anyone. However, these cases arise precisely when the plan fiduciary (generally the plan sponsor) is in financial difficulty and unable to make the plan whole. "Fiduciaries may have few assets, 'but fiduciaries, very often, when they breach their duties, don't do it by themselves. They have help.'" Labor Department to Back Bill on Lawsuits Against Non-Fiduciaries, 20 Pens. & Ben. Rep. (BNA) No. 29, at 1526 (July 19, 1993) (quoting Morton Klevan, Director of the Office of Policy and Legislative Analysis of the Department of Labor).
315. 29 U.S.C. § 1105(a) (1994).
316. Thus, courts generally had found liability if the nonfiduciary: (1) had actual knowledge that a breach of ERISA fiduciary duty is occurring or the legal equivalent of such knowledge and (2) nonetheless takes action which furthers or completes the breach. See, e.g., Freund v. Marshall & Ilsley Bank, 485 F. Supp. 629, 642 (W.D. Wis. 1979) (quoting GEORGE G. BOGERT & GEORGE T. BOGERT, THE LAW OF TRUSTS & TRUSTEES § 901, at 258-59 (2d rev. ed. 1995), which identifies the two elements necessary to sustain a cause of action against a nonfiduciary: "(1) an act or omission which furthers or completes the breach of trust by the trustee; and (2) knowledge at the time that the transaction amounted to a breach of trust, or the legal equivalent of such knowledge").
317. Mertens v. Hewett Assocs., Inc., 113 S. Ct. 2063, 2071 (1993); see also DOL Urges Overturn of Mertens: Says Ruling Will Hamper Enforcement, 20 Pens. & Ben. Rep. (BNA) No. 31, at 1638, 1639 (Aug. 2, 1993) (exposing nonfiduciaries to liability under ERISA would lead to increased costs, which would be passed on to plan participants in the form of decreased benefits).
318. See, e.g., Whitfield v. Lindemann, 853 F.2d 1298 (5th Cir. 1988), cert. denied, 490 U.S. 1089 (1989); Brock v. Hendershott, 840 F.2d 339 (6th Cir. 1988); Lowen v. Tower Asset Management, Inc., 829 F.2d 1209 (2d Cir. 1987); Fink v. National Sav. & Trust Co., 772 F.2d 951 (D.C. Cir. 1985) (dictum); Thornton v. Evans, 692 F.2d 1064 (7th Cir. 1982). Prior to Mertens, only two circuits had refused to allowing a cause of action against nonfiduciaries for knowing participation. See Useden v. Acker, 947 F.2d 1563 (11th Cir. 1991). cert. denied, 113 S. Ct. 2927 (1993); Nieto v. Ecker, 845 F.2d 868 (9th Cir. 1988).