Barrett Says SCOTUS Liberals Rely on 'Fictional Premise' in Their Dissent
Summary
The Supreme Court ruled 6-3 that federal law does not allow private individuals or groups to sue to undo contracts under the Investment Company Act. Justice Amy Coney Barrett wrote the majority opinion, criticizing the court’s liberal justices for misinterpreting the law and emphasizing that Congress, not courts, decides who can sue.Key Facts
- The case involved whether Section 47(b) of the Investment Company Act lets private parties cancel contracts that break the law.
- The court said the law does not create an implied right for private parties to sue in this way.
- The ruling reverses lower court decisions that had allowed activist investors to challenge certain fund rules.
- The case was brought by Saba Capital, an activist hedge fund, against voting limits in closed-end investment funds.
- The Court emphasized that enforcement mostly belongs to the Securities and Exchange Commission (SEC).
- Justice Barrett wrote that the dissent relies on a mistaken idea that Congress has a shared private view on this issue.
- The decision limits shareholder activism lawsuits by closing a legal route used to challenge fund governance.
- The ruling suggests future disputes may shift from courts to regulators like the SEC.
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