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Supreme Court Decisions Survive Senate Action on Financial Reform

Marcia Coyle

The National Law Journal

May 21, 2010

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Three key Supreme Court decisions, including one rejecting liability for
lawyers, accountants and bankers who aid and abet in the violation of
securities laws, survived attempts to overturn them during the Senate's
consideration of landmark financial reform
legislation<http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202458522050>
.

Despite support from a coalition of consumer, investor, labor and other
groups, an amendment targeting*Stoneridge Investment v.
Scientific-Atlanta* (2008)
and *Central Bank N.A. v. First Interstate Bank N.A.* (1994) failed to reach
a vote before the lawmakers moved late Thursday night to halt 30 hours of
cloture debate and take a final vote on the reform bill.

The two decisions rejected the private right of action for aiders and
abettors of security violations because Congress had not explicitly stated
its intent to include it in the relevant statute. In *Stoneridge*, the Court
said, "The decision to extend the cause of action is thus for the Congress,
not for this Court."

The amendment, sponsored by Sen. Arlen Specter, D-Pa., and 11 other
Democrats, had drawn heavy opposition from the U.S. Chamber of Commerce.

A vote was taken on an amendment to overturn another Supreme Court decision
— the 1978 ruling in*Marquette National Bank of Minneapolis v. First of
Omaha Service Corp.* The justices ruled in that case that the 1863 National
Bank Act preempted state interest rate regulation. The decision triggered
the relocation of national banks to states lacking interest rate limits.

The amendment by Sen. Sheldon Whitehouse, D-R.I., would have changed the law
to make clear that credit card companies and other national bank lenders —
no matter where in the country they are located — must abide by the interest
rate limits of the states in which their customers reside.

The Senate defeated the amendment, 60-35, on May 19.

Congress now will proceed to reconcile the Senate reform bill with a House
package approved last December on a vote of 223-202.
*
Marcia Coyle can be contacted at mcoyle@alm.com.*
--
Eric D. Schwerin
Rosemont Seneca Partners
(202) 333-1880
eschwerin@rosemontseneca.co