Gordon v. New York Stock Exchange, Inc., 422 U.S. 659 (1975)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Petitioner, individually and on behalf of an asserted class of small investors, filed suit against respondents -- the New York Stock Exchange, the American Stock Exchange, and two member firms of the Exchanges -- claiming that the system of fixed commission rates utilized by the Exchanges at that time for transactions of less than $500,000 violated §§ 1 and 2 of the Sherman Act. The District Court and the Court of Appeals both concluded that the fixed commission rates were immunized from antitrust attack because of the authority of the Securities and Exchange Commission (SEC) under § 19(b)(9) of the Securities Exchange Act of 1934 to approve or disapprove exchange commission rates and its exercise of that power.

Held: The system of fixed commission rates, which is under the active supervision of the SEC, is beyond the reach of the antitrust laws. Pp. 663-691.

(a) The statutory provision authorizing regulation of rates, § 19(b)(9), the SEC’s long regulatory practice in reviewing proposed rate changes and in making detailed studies of rates, culminating in the adoption of a rule requiring a transition to competitive rates, and continued congressional approval of the SEC’s authority over rates, all show that Congress intended the Securities Exchange Act to leave the supervision of the fixing of reasonable rates to the SEC. Pp. 663-682.

(b) To interpose antitrust laws, which would bar fixed commission rates as per se violations of the Sherman Act, in the face of positive SEC action, would unduly interfere with the intended operation of the Securities Exchange Act. Hence, implied repeal of the antitrust laws is necessary to make that Act work as intended, since failure to imply repeal would render § 19(b)(9) nugatory. Silver v. New York Stock Exchange, 373 U.S. 341; Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, distinguished. Pp. 682-691.

498 F.2d 1303, affirmed.

BLACKMUN, J., delivered the opinion for a unanimous Court. DOUGLAS, J., filed a concurring opinion, post, p. 691. STEWART, J., filed a concurring opinion, in which BRENNAN, J., joined, post, p. 692.