We in business law tend to be creatures of the law reviews. Good new books don’t come along very often. When one does appear, it is doubly welcome. A History of Securities Law in the Supreme Court, by A.C. Pritchard and Robert B. Thompson, recently published by Oxford Press, is that rare, good book. It is absolutely, doubly welcome.
Pritchard and Thompson present every one of what turns out to be 134 cases. For the reader it is a bit like taking a law school course—the material goes case by case. This may not sound enticing, but please believe me when I say that it is, for the authors are master teachers. It is just that the medium is the written word rather than an oral presentation. Excellent writing is called for and Pritchard and Thompson answer the call. This book is fun to read.
I suspect that knowing the plot line in advance helps. The book makes no attempt to teach the basic securities law course, even as it is unabashedly instructional. The focus is on the top court and how it dealt with the business law cases falling within its remit rather than on the mechanics of registering securities or establishing exemptions from registration. At the same time, the book has tremendous value as a supplement to basic education in the field. The reader comes away with all sorts of information the basic course does not supply. There is a load of value added, for the stories are not just superb case summaries. The authors have gone to the archives and draw on the justices’ correspondence, conference notes, memos, and draft opinions to give us a sequence of illuminating case-based stories.
The account’s progress is roughly chronological. But a topical organization emerges to thicken the plotlines. Once one gets past enactment and the early cases on constitutionality, the Holding Company Act and the Chandler Act, one encounters a sequence of substantive clusters—first judicial review of agency process, then definitional and boundary issues, then on to insider trading and private litigation, and, finally, to federalism. Within each cluster the chronology is completed—we pick up the topic at its start and carry it through to today.
The account tracks the history of administrative law. Agency deference and purposive interpretation dominate the early years—the SEC almost always wins. Textualist exactitude follows along with a checkered record of results for the agency. Private enforcement, consistently supported by the agency, rises and then gets its wings clipped, but not so much as to prevent it from evolving into the billion-dollar business that it is today.
Mighty personalities come to dominate the account. Frankfurter and Douglas take center stage in the early years to be followed by Lewis Powell, who emerges as the story’s hero at its climactic stage. The post-Powell era is a denouement, with a diminution in the number of interesting cases for study as securities law goes to the Court’s back burner. If there’s a villain, it is Douglas. Much as I wanted to resist his appearance in this role, I have to admit that it emerges intrinsically from the story and, perhaps, this particular justice’s self-involved approach to things. Frankfurter, who had personality problems of his own, is the tragic character, bereft of influence despite superior technical expertise and manifest genius. Finally, a nifty subplot emerges in the back and forth between the top court and securities law’s mother court, the Second Circuit, along with welcome, albeit brief, appearances by the Learned and Gus Hand, Jerome Frank, Henry Friendly, and my old boss, William H. Timbers.
I have always thought that we overdo the Supreme Court in our teaching and scholarship. Now I am not so sure. Meanwhile, this book should be on the desk of every teacher of not only securities but corporations. I expect to be going back to it regularly.
