author: Mr. Justice Stewart

text:
    UNITED STATES v. RELIABLE TRANSFER CO., INC.
    No. 74-363.
    Argued March 19, 1975
    Decided May 19, 1975
    Stewart, J., delivered the opinion for a unanimous Court.

      John P. Rupp argued the cause for the United States pro hac vice. With him on the brief were Solicitor General Bork, Assistant Attorney General Hills, William Kanter, and Richard A. Olderman.

      Copal Mintz argued the cause for respondent. With him on the brief was Herbert B. Halberg.

   Mr. Justice Stewart

delivered the opinion of the Court.

More than a century ago, in The Schooner Catharine v. Dickinson, 17 How. 170, this Court established in our admiralty law the rule of divided damages. That rule, most commonly applied in cases of collision between two vessels, requires the equal division of property damage whenever both parties are found to be guilty of contributing fault, whatever the relative degree of their fault may have been. The courts of every major maritime nation except ours have long since abandoned that rule, and now assess damages in such cases on the basis of proportionate fault when such an allocation can reasonably be made. In the present case we are called upon to decide whether this country’s admiralty rule of divided damages should be replaced by a rule requiring, when possible, the allocation of liability for damages in proportion to the relative fault of each party.

I

On a clear but windy December night in 1968, the Mary A. Whalen, a coastal tanker owned by the respondent Reliable Transfer Co., embarked from Constable Hook, N. J., for Island Park, N. Y., with a load of fuel oil. The voyage ended, instead, with the vessel stranded on a sand bar off Rockaway Point outside New York Harbor.

The Whalen’s course led across the mouth of Rock-away Inlet, a narrow body of water that lies between a breakwater to the southeast and the shoreline of Coney Island to the northwest. The breakwater is ordinarily marked at its southernmost point by a flashing light maintained by the Coast Guard. As, however, the Whalen’s captain and a deckhand observed while the vessel was proceeding southwardly across the inlet, the light was not operating that night. As the Whalen approached Rockaway Point about half an hour later, her captain attempted to pass a tug with a barge in tow ahead, but, after determining that he could not overtake them, decided to make a 180° turn to pass astern of the barge. At this time the tide was at flood, and the waves, whipped by northwest winds of gale force, were eight to ten feet high. After making the 180° turn and passing astern of the barge, the captain headed the Whalen eastwardly, believing that the vessel was then south of the breakwater and that he was heading her for the open sea. He was wrong. About a minute later the light structure on the southern point of the breakwater came into view. Turning to avoid rocks visible ahead, the Whalen ran aground in the sand.

The respondent brought this action against the United States in Federal District Court, under the Suits in Admiralty Act, 41 Stat. 525, 46 U. S. C. § 741 et seq., and the Federal Tort Claims Act, 28 U. S. C. § 1346 et seq., seeking to recover for damages to the Whalen caused by the stranding. The District Court found that the vessel’s grounding was caused 25% by the failure of the Coast • Guard to maintain the breakwater light and 75% by the fault of the Whalen. In so finding on the issue of comparative fault, the court stated:

“The fault of the vessel was more egregious than the fault of the Coast Guard. Attempting to negotiate a turn to the east, in the narrow space between the bell buoy No. 4 and the shoals off Rockaway Point, the Captain set his course without knowing where he was. Obviously, he would not have found the breakwater light looming directly ahead of him within a minute after his change of course, if he had not been north of the point where he believed he was.
“Equipped with look-out, chart, searchlight, radiotelephone, and radar, he made use . of nothing except his own guesswork judgment. After . . . turning in a loop toward the north so as to pass astern of the tow, he should have made sure of his position before setting his new 73° course. The fact that a northwest gale blowing at 45 knots with eight to ten foot seas made it difficult to see, emphasizes the need for caution rather than excusing a turn into the unknown. . .

The court held, however, that the settled admiralty rule of divided damages required each party to bear one-half of the damages to the vessel.

The Court of Appeals for the Second Circuit affirmed this judgment. 497 F. 2d 1036. It held that the trial court “was not clearly erroneous in finding that the negligence of both parties, in the proportions stated, caused the stranding.” Id., at 1037-1038. And, although “mindful of the criticism of the equal division of damages rule and . . . recognizing] the force of the argument that in this type of case division of damages in proportion to the degree of fault may be more equitable,” id., at 1038, the appellate court felt constrained to adhere to the established rule and “to leave doctrinal development to the Supreme Court or to await appropriate action by Congress.” Ibid.

We granted certiorari, 419 U. S. 1018, to consider the continued validity of the divided damages rule.

II

The precise origins of the divided damages rule are shrouded in the mists of history. In any event it was not until early in the 19th century that the divided damages rule as we know it emerged clearly in British admiralty law. In 1815, in The Woodrop-Sims, 2 Dods. 83, 165 Eng. Rep. 1422, Sir William Scott, later Lord Stowell, considered the various circumstances under which maritime collisions could occur and stated that division of damages was appropriate in those cases “where both parties are to blame.” Id., at 85, 165 Eng. Rep., at 1423. In such cases the total damages were to be “apportioned between” the parties “as having been occasioned by the fault of both of them.” Ibid. Nine years later the divided damages rule became settled in English admiralty law when the House of Lords in a maritime collision case where both ships were at fault reversed a decision of a Scottish court that had apportioned damages by degree of blame, and, relying on The Woodrop-Sims, ordered that the damages be divided equally. Hay v. Le Neve, 2 Shaw H. L. 395.

It was against this background that in 1855 this Court adopted the rule of equal division of damages in The Schooner Catharine v. Dickinson, 17 How. 170. The rule was adopted because it was then the prevailing rule in England, because it had become the majority rule in the lower federal courts, and because it seemed the “most just and equitable, and . . . best [tended] to induce care and vigilance on both sides, in the navigation.” Id., at 177-178. There can be no question that subsequent history and experience have conspicuously eroded the rule’s foundations.

It was true at the time of The Catharine that the divided damages rule was well entrenched in English law. The rule was an ancient form of rough justice, a means of apportioning damages where it was difficult to measure which party was more at fault. See 4 R. Marsden, British Shipping Laws, Collisions at Sea §§ 119-147 (11th ed. 1961); Staring, Contribution and Division of Damages in Admiralty and Maritime Cases, 45 Calif-. L. Rev. 304, 305-310 (1957). But England has long since abandoned the rule and now follows the Brussels Collision Liability Convention of 1910 that provides for the apportionment of damages on the basis of “degree” of fault whenever it is possible to do so. Indeed, the United States is now virtually alone among the world’s major maritime nations in not adhering to the Convention with its rule of proportional fault — a fact that encourages transoceanic forum shopping. See G. Gilmore & C. Black, The Law of Admiralty 529 (2d ed. 1975) (hereinafter Gilmore & Black).

While the lower federal courts originally adhered to the divided damages rule, they have more recently followed it only grudgingly, terming it “unfair,” “illogical,” “arbitrary,” “archaic and frequently unjust.” Judge Learned Hand was a particularly stern critic of the rule. Dissenting in National Bulk Carriers v. United States, 183 F. 2d 405, 410 (CA2), he wrote: “An equal division [of damages] in this case would be plainly unjust; they ought to be divided in some such proportion as five to one. And so they could be but for our obstinate cleaving to the ancient rule which has been abrogated by nearly all civilized nations.” And Judge Hand had all but invited this Court to overturn the rule when, in an earlier opinion for the Court of Appeals for the Second Circuit, he stated that “we have no power to divest ourselves of this vestigial relic; we can only go so far as to close our eyes to doubtful delinquencies.” Oriental Trading & Transport Co. v. Gulf Oil Corp., 173 F. 2d 108, 111. Some courts, even bolder, have simply ignored the rule. See J. Griffin, The American Law of Collision 564 (1949); Staring, supra, at 341-342. Cf. The Margaret, 30 F. 2d 923 (CA3).

It is no longer apparent, if it ever was, that this Solomonic division of damages serves to achieve even rough justice. An equal division of damages is a reasonably satisfactory result only where each vessel’s fault is approximately equal and each vessel thus assumes a share of the collision damages in proportion to its share of the blame, or where proportionate degrees of fault cannot be measured and determined on a rational basis. The rule produces palpably unfair results in every other case. For example, where one ship’s fault in causing a collision is relatively slight and her damages small, and where the second ship is grossly negligent and suffers extensive damage, the first ship must still make a substantial payment to the second. “This result hardly commends itself to the sense of justice any more appealingly than does the common law doctrine of contributory negligence ....” Gilmore & Black 528.

And the potential unfairness of the division is magnified by the application of the rule of The Pennsyl vania, 19 Wall. 125, whereby a ship’s relatively minor statutory violation will require her to bear half the collision damage unless she can satisfy the heavy burden of showing “not merely that her fault might not have been one of the causes, or that it probably was not, but that it could not have been.” Id., at 136 (emphasis added). See O/Y Finlayson-Forssa A/B v. Pan Atlantic S. S. Corp., 259 F. 2d 11, 22 (CA5); The New York-Marine No. 10, 109 F. 2d 564, 566 (CA2). See also Griffin, supra, § 202.

The Court has long implicitly recognized the patent harshness of an equal division of damages in the face of disparate blame by applying the “major-minor” fault doctrine to find a grossly negligent party solely at fault. But this escape valve, in addition to being inherently unreliable, simply replaces one unfairness with another. That a vessel is primarily negligent does not justify its shouldering all responsibility, nor excuse the slightly negligent vessel from bearing any liability at all. See Tank Barge Hygrade v. The Gatco New Jersey, 250 F. 2d 485, 488 (CA3). The problem remains where it began — with the divided damages rule:

“[T]he doctrine that a court should not look too jealously at the navigation of one vessel, when the faults of the other are glaring, is in the nature of a sop to Cerberus. It is no doubt better than nothing; but it is inadequate to reach the heart of the matter, and constitutes a constant temptation to courts to avoid a decision on the merits.” National Bulk Carriers v. United States, 183 F. 2d 405, 410 (CA2) (L. Hand, J., dissenting).

The divided damages rule has been said to be justified by the difficulty of determining comparative degrees of negligence when both parties are concededly guilty of contributing fault. The Max Morris, 137 U. S. 1, 12. Although there is some force in this argument, it cannot justify an equal division of damages in every ease of collision based on mutual fault. When it is impossible fairly to allocate degrees of fault, the division of damages equally between wrongdoing parties is an equitable solution. But the rule is unnecessarily crude and inequitable in a case like this one where an allocation of disparate proportional fault has been made. Potential problems of proof in some cases hardly require adherence to an archaic and unfair rule in all cases. Every other major maritime nation has evidently been able to apply a rule of comparative negligence without serious problems, see Mole & Wilson, A Study of Comparative Negligence, 17 Corn. L. Q. 333, 346 (1932); In re Adams’ Petition, 125 F. Supp. 110, 114 (SDNY), aff’d, 237 F. 2d 884 (CA2), and in our own admiralty law a rule of comparative negligence has long been applied with no untoward difficulties in personal injury actions. See, e. g., Pope & Talbot, Inc. v. Hawn, 346 U. S. 406, 409. See also Merchant Marine (Jones) Act, 38 Stat. 1185, as amended, 41 Stat. 1007, 46 U. S. C. § 688; Death on the High Seas Act, 41 Stat. 537, 46 U. S. C. § 766.

The argument has also been made that the divided damages rule promotes out-of-court settlements, because when it becomes apparent that both vessels are at fault, both parties can readily agree to divide the damages— thus avoiding the expense and delay of prolonged litigation and the concomitant burden on the courts. It would be far more difficult, it is argued, for the parties to agree on who was more at fault and to apportion damages accordingly. But the argument is hardly persuasive. For if the fault of the two parties is markedly disproportionate, it is in the interest of the slightly negligent party to litigate the controversy in the hope that the major-minor fault rule may eventually persuade a court to absolve it of all liability. And if, on the other hand, it appears after a realistic assessment of the situation that the fault of both parties is roughly equal, then there is no reason why a rule that apportions damages would be any less likely to induce a settlement than a rule that always divides damages equally. Experience with comparative negligence in the personal injury area teaches that a rule of fairness in court will produce fair out-of-court settlements. But even if this argument were more persuasive than it is, it could hardly be accepted. For, at bottom, it asks us to continue the operation of an archaic rule because its facile application out of court yields quick, though inequitable, settlements, and relieves the courts of some litigation. Congestion in the courts cannot justify a legal rule that produces unjust results in litigation simply to encourage speedy out-of-court accommodations.

Finally, the respondent suggests that the creation of a new rule of damages in maritime collision cases is a task for Congress and not for this Court. But the Judiciary has traditionally taken the lead in formulating flexible and fair remedies in the law maritime, and “Congress has largely left to this Court the responsibility for fashioning the controlling rules of admiralty law.” Fitzgerald v. United States Lines Co., 374 U. S. 16, 20. See also Moragne v. States Marine Lines, 398 U. S. 375, 405 n. 17; Kermarec v. Compagnie Generate Transatlantique, 358 U. S. 625, 630-632. No statutory or judicial precept precludes a change in the rule of divided damages, and indeed a proportional fault rule would simply bring recovery for property damage in maritime collision cases into line with the rule of admiralty law long since established by Congress for personal injury cases. See the Jones Act, 46 U. S. C. § 688.

As the authors of a leading admiralty law treatise have put the matter:

“[T]here is no reason why the Supreme Court cannot at this late date ‘confess error’ and adopt the proportional fault doctrine without Congressional action. The resolution to follow the divided damages rule, taken 120 years ago, rested not on overwhelming authority but on judgments of fact and of fairness which may have been tenable then but are hardly so today. No ‘vested rights,’ in theory or fact, have intervened. The regard for ‘settled expectation’ which is the heart-reason of . . . stare decisis . . . can have no relevance in respect to such a rule; the concept of ‘settled expectation’ would be reduced to an absurdity were it to be applied to a rule of damages for negligent collision. The abrogation of the rule would not, it seems, produce any disharmony with other branches of the maritime law, general or statutory.” Gilmore & Black 531 (footnote omitted).

The rule of divided damages in admiralty has continued to prevail in this country by sheer inertia rather than by reason of any intrinsic merit. The reasons that originally led to the Court’s adoption of the rule have long since disappeared. The rule has been repeatedly criticized by experienced federal judges who have correctly pointed out that the result it works has too often been precisely the opposite of what the Court sought to achieve in The Schooner Catharine — the “just and equitable” allocation of damages. And worldwide experience has taught that that goal can be more nearly realized by a standard that allocates liability for damages according to comparative fault whenever possible.

We hold that when two or more parties have contributed by their fault to cause property damage in a maritime collision or stranding, liability for such damage is to be allocated among the parties proportionately to the comparative degree of their fault, and that liability for such damages is to be allocated equally only when the parties are equally at fault or when it is not possible fairly to measure the comparative degree of their fault.

Accordingly, the judgment before us is vacated and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

       The operation of the rule was described in The Sapphire, 18 Wall. 51, 56:
      “It is undoubtedly the rule in admiralty that where both vessels are in fault the sums representing the damage sustained by each must be added together and the aggregate divided between the two. This is in effect deducting the lesser from the greater and dividing the remainder. ... If one in fault has sustained no injury, it is liable for half the damages sustained by the other, though that other was also in fault.”
      Similarly, in The North Star, 106 U. S. 17, 22, the rule was thus stated:
      “[According to the general maritime law, in cases of collision occurring by the fault of both parties, the entire damage to both ships is added together in one common mass and equally divided between them, and thereupon arises a liability of one party to pay to the other such sum as is necessary to equalize the burden.”
      See also, e. g., White Oak Transportation Co. v. Boston, Cape Cod & New York Canal Co., 258 U. S. 341; The Eugene F. Moran, 212 U. S. 466.
      It has long been settled that the divided damages rule applies not only in cases of collision between two vessels, but also in cases like this one where a vessel partly at fault is damaged in collision or grounding because of the mutual contributing fault of a nonvessel party. Atlee v. Packet Co., 21 Wall. 389 (barge struck pier because of mutual fault of barge and of pier owner); White Oak Transportation Co. v. Boston, Cape Cod & New York Canal Co., supra (steamship ran aground in canal because of joint negligence of steamship and canal company). See also G. Gilmore & C. Black, The Law of Admiralty §7-17, pp. 522-523 (2d ed. 1975).

       The Government’s petition for certiorari presented the single question whether the admiralty rule of equally divided damages should be replaced by the rule of damages in proportion to fault. The respondent did not file a cross-petition for certiorari, but it now argues that the Government was solely at fault and requests an increase of the judgment in its favor to the full amount of its damages. However, absent a cross-petition for certiorari, the respondent may not now challenge the judgment of the Court of Appeals to enlarge its rights thereunder. Morley Constr. Co. v. Maryland Casualty Co., 300 U. S. 185, 190; United States v. American Railway Express Co., 265 U. S. 425, 435. Moreover, even if it could be argued that respondent’s challenge of the factual findings could be taken as an argument in support of the judgment, see Stern, When to Cross-Appeal or Cross-Petition — Certainty or Confusion?, 87 Harv. L. Rev. 763, 774 (1974), the findings of fact with respect to comparative negligence were concurred in by both the District Court and the Court of Appeals, and the respondent could not in this case meet its heavy burden under the “two-court rule.” Graver Mfg. Co. v. Linde Co., 336 U. S. 271, 275. See Berenyi v. Immigration Director, 385 U. S. 630, 635.

       Most commentators have traced the rule back to Article XIV of the Laws of Oleron, promulgated about A. D. 1150, which provided that in cases of collision between a ship under way and another at anchor, the damages would be divided equally between the owners of the two vessels, so long as the captain and crew of the ship under way swore under oath that the collision was accidental. See, e. g., 4 R. Marsden, British Shipping Laws, Collisions at Sea §119 (11th ed. 1961). See also Staring, Contribution and Division of Damages in Admiralty and Maritime Cases, 45 Calif. L. Rev. 304 (1957).
      Other maritime nations enacted provisions similar to Article XIV during the same period, with slight variations in the scope of the rule and the principle of division. Marsden, supra, §§ 119-125. “The principle . . . underlying the rule seems to have been that collision was a peril of the sea — a common misfortune to be borne by all parties, either equally or rateably according to their interests at risk.” Id., § 140.

         The Court has acknowledged the continued existence of the divided damages rule in at least two recent cases. See Weyerhaeuser S. S. Co. v. United States, 372 U. S. 597, 603; Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U. S. 282, 284. But in neither case did the Court have occasion to re-examine the rule or to appraise the validity of its underpinnings or the propriety of its present application. The Court granted certiorari in Union Oil Co. v. The San Jacinto, 409 U. S. 140, to reconsider the divided damages rule, but did not reach the issue because of our conclusion that one of the vessels involved in that case was totally free of contributing fault.

       Maritime Conventions Act, 1911, 1 & 2 Geo. 5, c. 57, § 1.

       Article 4 of the Convention provides in part: “If two or more vessels are in fault the liability of each vessel shall be in proportion to the degree of the faults respectively committed. Provided that if, having regard to the circumstances, it is not possible to establish the degree of the respective faults, or if it appears that the faults are equal, the liability shall be apportioned equally.”'

       We are informed by the Government that among the jurisdictions that have ratified or adhere to the Brussels Convention on Collision Liability are: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Egypt, Finland, France, Germany, Great Britain, Greece, Haiti, Hungary, Iceland, India, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Nicaragua, Norway, Poland, Portugal, Romania, Sweden, Switzerland, Turkey, U. S. S. R., Uruguay, and Yugoslavia.- See 6 A. Knauth & C. Knauth, Benedict on Admiralty 38-39 (7th ed. 1969). See also J. Griffin, The American Law of Collision 857 (1949); Staring, supra, n. 3, at 340-341; Tank Barge Hygrade v. The Gatco New Jersey, 250 F. 2d 485, 488 (CA3).

        Ahlgren v. Red Star Towing & Transp. Co., 214 F. 2d 618, 620 (CA2).

        Marine Fuel Transfer Corp. v. The Ruth, 231 F. 2d 319, 321 (CA2).

        Tank Barge Hygrade v. The Gatco New Jersey, supra, at 488. See also Mystic S. S. Corp. v. M/S Antonio Ferraz, 498 F. 2d 538, 539 n. 1 (CA2); Petition of Oskar Tiedemann & Co., 289 F. 2d 237, 241-242 (CA3); In re Adams’ Petition, 237 F. 2d 884, 887 (CA2); Luckenbach S. S. Co. v. United States, 157 F. 2d 250, 252 (CA2).

       It is difficult to imagine any manner in which the divided damages rule would be more likely to “induce care and vigilance” than a comparative negligence rule that also penalizes wrongdoing, but in proportion to measure of fault. A rule that divides damages by degree of fault would seem better designed to induce care than the rule of equally divided damages, because it imposes the strongest deterrent upon the wrongful behavior that is most likely to harm others.

       See, e. g., The City of New York, 147 U. S. 72, 85:
      “Where fault on the part of one vessel is established by uneontradicted testimony, and such fault is, of itself, sufficient to account for the disaster, it is not enough for such vessel, to raise a doubt with regard to the management of the other vessel. There is some presumption at least adverse to its claim, and any reasonable doubt with regard to the propriety of the conduct of such other vessel should be resolved in its favor.”
      See also The Victory & The Plymothian, 168 U. S. 410; The Umbria, 166 U. S. 404; The Oregon, 158 U. S. 186; The Ludvig Holberg, 157 U. S. 60.

       The rule of comparative negligence applicable to personal injury actions in our maritime law, see the Jones Act, 46 U. S. C. § 688; Death on the High Seas Act, 46 U. S. C. § 766, does not appear to discourage the negotiation of settlements in such litigation. It has been reported, for example, that of the marine personal injury cases involving a federal question that were terminated in fiscal year 1974, only 9.6% ever reached trial. 1974 Proceedings of the Judicial Conference of the United States and Annual Report of the Director of the Administrative Office of the United States Courts, Table C4, p. 416.

       The respondent also relies on the fact that the Senate has twice failed to ratify the Brussels Convention with its proportional fault rule. It is urged that this inaction indicates “grave doubt” in Congress that rejection of the divided damages rule will further justice. But even if we could find guidance in such "negative legislation,” Moragne v. States Marine Lines, 398 U. S. 375, 405 n. 17, it appears that the Senate took no action with respect to the Convention, not because of opposition to a proportional fault rule, but because of the Convention’s poor translation and the opposition of cargo interests to the provision which would prevent cargo from recovering in full from the noncarrying vessel by eliminating joint and several liability of vessels for cargo damage. See H. Baer, Admiralty Law of the Supreme Court 414-415 (2d ed. 1969); Staring, supra, n. 3, at 343. See also Comment, 64 Yale L. J. 878 (1955).

       This Court, in other appropriate contexts, has not hesitated to overrule an earlier decision and settle a matter of continuing concern, even though relief might have been obtained by legislation. See Burnet v. Coronado Oil & Gas Co., 285 U. S. 393, 406 n. 1 (Brandéis, J., dissenting) (collecting cases).

       See also Donovan & Ray, Mutual Fault — Half-Damage Rule — A Critical Analysis, 41 Ins. Coun. J. 395 (1974); Allbritton, Division of Damages in Admiralty — A Rising Tide of Confusion, 2 J. of Maritime Law and Commerce 323 (1971); Jackson, The Archaic Rule of Dividing Damages in Marine Collisions, 19 Ala. L. Rev. 263 (1967); Staring, supra, n. 3, at 304; Mole & Wilson, A Study of Comparative Negligence, 17 Corn. L. Q. 333 (1932); and Huger, The Proportional Damage Rule in Collisions at Sea, 13 Corn. L. Q. 531 (1928).


source: Caselaw Access Project

author: Me. Justice Marshall

license: Public Domain

text:
    SECURITIES INVESTOR PROTECTION CORP. v. BARBOUR et al.
    No. 73-2055.
    Argued March 17-18, 1975
    Decided May 19, 1975

      Marshall, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Stewart, White, Blackmun, Powell, and Rehnquist, JJ., joined. Douglas, J., dissented.

      Wilfred R. Caron argued the cause for petitioner. With him on the briefs was Theodore H. Focht.

      W. Ovid Collins, Jr., argued the cause and filed a brief for respondent Barbour. Solicitor General Bork, William L. Patton, Lawrence E. Nerheim, and David Ferber filed briefs for respondent Securities and Exchange Commission.
   Me. Justice Marshall

delivered the opinion of the Court.

The Securities Investor Protection Corp. (SIPC) was established by Congress as a nonprofit membership corporation for the purpose, inter alia, of providing financial relief to the customers of failing broker-dealers with whom they had left cash or securities on deposit. The question presented by this case is whether such customers have an implied private right of action under the Securities Investor Protection Act of 1970 (Act or SIPA), 84 Stat. 1636, 15 U. S. C. § 78aaa et seg., to compel the SIPC to exercise its statutory authority for their benefit.

I

In December 1970 the Securities and Exchange Commission (SEC) filed a complaint in District Court against Guaranty Bond and Securities Corp., a registered broker-dealer, to enjoin continued violation of the Commission’s net capital and other rules. On January 6, 1971, the District Court issued a preliminary injunction, and on January 29 it granted the Commission’s motion for appointment of a receiver to wind up the affairs of Guaranty Bond. James C. Barbour (hereafter respondent) was appointed receiver.

On April 6, 1972, respondent, alleging that customers of Guaranty Bond would sustain a loss at least equal to the costs of administering the receivership, obtained from the court an order directing the SEC and SIPC to show cause “why the remedies afforded by the [SIPA] should not be made available in this proceeding.” In its answer the SEC took the position that respondent had not demonstrated that Guaranty’s customers would in fact sustain any loss since it appeared that the receiver would have a cause of action for damages or restitution against Guaranty’s parent company and principals. The SIPC, on the other hand, challenged the receiver’s standing to maintain an action to compel its intervention and, in direct opposition to the position of the SEC, argued that Guaranty’s insolvency prior to the December 30, 1970, date on which the SIPA took effect meant that application of the Act to this case would give it an unlawful retroactive effect.

The District Court upheld the receiver’s right of action, but denied relief on the ground that Guaranty’s hopeless insolvency prior to the effective date of the SIPA rendered the Act inapplicable. The Court of Appeals for the Sixth Circuit reversed. Since Guaranty had conducted 101 transactions after December 30, and the SEC did not move to prevent its carrying on business as a broker-dealer until January 6, it held that Guaranty qualified as a broker-dealer on the effective date of the Act. The court then rejected the SIPC’s argument that the provision for SEC enforcement actions to compel the SIPC to perform its functions was meant to be exclusive of such actions by protected customers or their representative, and remanded the case for further proceedings. We granted certiorari, limited to the questions whether customers have an implied right of action to compel the SIPC to act and, if so, whether a receiver has standing to maintain it. 419 U. S. 894 (1974). Since we now reverse the Court of Appeals on the ground that no implied right of action exists, we do not address the second question.

II

Following a period of great expansion in the 1960’s, the securities industry experienced a business contraction that led to the failure or instability of a significant number of brokerage firms. Customers of failed firms found their cash and securities on deposit either dissipated or tied up in lengthy bankruptcy proceedings. In addition to its disastrous effects on customer assets and investor confidence, this situation also threatened a “domino effect” involving otherwise solvent brokers that had substantial open transactions with firms that failed. Congress enacted the SIPA to arrest this process, restore investor confidence in the capital markets, and upgrade the financial responsibility requirements for registered brokers and dealers. S. Rep. No. 91-1218, pp. 2-4 (1970); H. R. Rep. No. 91-1613, pp. 2-4 (1970).

The Act apportions responsibility for these tasks among the SEC, the securities industry self-regulatory organizations, and the SIPC, a nonprofit, private membership corporation to which most registered brokers and dealers are required to belong. 15 U. S. C. § 78ccc. Most important for present purposes, the Act creates a new form of liquidation proceeding, applicable only to member firms, designed to accomplish the completion of open transactions and the speedy return of most customer property.

To this end, the SIPC is required to establish and maintain a fund for customer protection by laying assessments on the annual gross revenues of its members. The SEC and the securities industry self-regulatory organizations are required to notify the SIPC whenever it appears that a member is in or approaching financial difficulty. If the SIPC determines that a member has failed or is in danger of failing to meet its obligations to customers, and finds any one of five specified conditions suggestive of financial irresponsibility, then it “may apply to any court of competent jurisdiction ... for a decree adjudicating that customers of such member are in need of the protection provided by [the Act].” § 78eee (a) (2).

The mere filing of an SIPC application gives the court in which it is filed exclusive jurisdiction over the member and its property, wherever located, and requires the court to stay “any pending bankruptcy, mortgage foreclosure, equity receivership, or other proceeding to reorganize, conserve, or liquidate the [member] or its property and any other suit against any receiver, conservator, or trustee of the [member] or its property.” § 78eee (b) (2). If the SEC has pending any action against the member, it may, with the Commission’s consent, be combined with the SIPC proceeding. If no such action is pending, the SEC may intervene as a party to the SIPC proceeding.

If the court finds any of the five conditions on which an SIPC application may be based, it must grant the application and issue the decree, and appoint as trustee for the liquidation of the business and as attorney for the trustee, “such persons as SIPC shall specify.” §§ 78eee (b)(1), (3).

The trustee is empowered and directed by the Act to return customer property, complete open transactions, enforce rights of subrogation, and liquidate the business of the member, § 78fff (a); he is not empowered to reorganize or rehabilitate the business. The SIPC is required to advance him such sums as are necessary to complete open transactions, and to accomplish the return of customer property up to a value of $50,000. § 78fff (f).

The role of the SEC in this scheme’ insofar as relevant to the present case, is one of “plenary authority” to supervise the SIPC. S. Rep. No. 91-1218, supra, at 1; see H. R. Rep. No. 91-1613, supra, at 12. For example, it may disapprove in whole or in part any bylaw or rule adopted by the Board of Directors of the SIPC, or require the adoption of any rule it deems appropriate, in order to promote the public interest and the purposes of the Act. 15 U. S. C. § 78ccc (e). It may inspect and examine the SIPC’s records and require that any information it deems appropriate be furnished to it, and it receives the corporation’s annual report for inspection and transmission, with its comments, to the President and Congress. §78ggg(c). It may participate in any liquidation proceeding initiated by the SIPC, but even more important, § 7 (b) of the Act, § 78ggg (b), provides: “Enforcement of actions. — In the event of the refusal of SIPC to commit its funds or otherwise to act for the protection of customers of any member of SIPC, the Commission may apply to the district court of the United States in which the principal office of SIPC is located for an order requiring SIPC to discharge its obligations under [the Act] and for such other relief as the court may deem appropriate to carry out the purposes of [the Act].”

It is against this background relationship between the SIPC and the SEC that we must approach the question whether, in addition to the Commission, a member’s customers or their representative may seek in district court to compel the SIPC “to commit its funds or otherwise to act for the protection” of such customers.

Ill

The respondent contends that since the SIPA does not in terms preclude a private cause of action at the instance of a member broker’s customers, and since such customers are the intended beneficiaries of the Act, the Court should imply a right of action by which customers can compel the SIPC to discharge its obligations to them. As we said only last Term in analyzing a similar contention: “It goes without saying . . . that the inference of such a private cause of action not otherwise authorized by the statute must be consistent with the evident legislative intent and, of course, with the effectuation of the purposes intended to be served by the Act.” Passenger Corp. v. Passengers Assn., 414 U. S. 453, 457-458 (1974) (hereinafter Amtrak).

In Amtrak itself the petitioner was a corporation created by Congress to assume from private railroads certain intercity rail passenger service responsibilities. The respondent passenger association brought an action to enjoin the discontinuance of a particular service as announced by the corporation pursuant to its authority under § 404 (b) (2) of the Rail Passenger Service Act of 1970 (Amtrak Act), 45 U. S. C. § 564 (b)(2). That Act made express provision for suits against Amtrak to enforce its duties and obligations only “upon petition of the Attorney General of the United States or, in a case involving a labor agreement, upon petition of any employee affected” by the agreement. 45 U. S. C. § 547 (a). There, as here, the plaintiff-respondent argued that statutory authorization for one type of action against the congressionally created corporation did not preclude another at the instance of the intended beneficiaries of the law.

The Court’s analysis of the claim in Amtrak began with the observation that express statutory provision for one form of proceeding ordinarily implies that no other means of enforcement was intended by the Legislature. That implication would yield, however, to “clear contrary evidence of legislative intent,” 414 U. S., at 458, for which we turned to the legislative history and the overall structure of the Amtrak Act.

Inspection revealed that the legislative history of the Amtrak Act was entirely consonant with the implication of the statutory language that no private right of action was intended. The general structure and purpose of the Act gave further support to that conclusion. Congress had expected that, in creating an economically viable rail passenger system, some rail service would have to be discontinued by Amtrak; it had provided an efficient and expeditious means to that end, which seemed incompatible with an intent to allow a private action by any passenger affected by a discontinuance decision. Nor would the absence of a private right of action leave Amtrak free to disregard the public interest in its decisionmaking. In addition to investing the Attorney General with “authority to police the Amtrak system and to enforce the various duties and obligations imposed by the Act” by court action, Congress provided for “substantial scrutiny” over Amtrak’s operations by requiring it to make periodic reports to Congress and the President and to open its books to the Comptroller General for auditing. 414 U. S., at 464.

The similarities between the present case and Amtrak are undeniable and for the respondent, we think, insurmountable. As with Amtrak, so with the SIPC, Congress has created a corporate entity to solve a public problem; it has provided for substantial supervision of its operations by an agency charged with protection of the public interest — here the SEC — and for enforcement by that agency in court of the obligations imposed upon the corporation. The corporation is required to report to Congress and the President, and to open its books and records to the SEC and the Comptroller General. Farther, Congress has chartered the SIPC, unlike Amtrak, as a nonprofit corporation, and it has put its direction in the hands of a publicly chosen board of directors.

Beyond the inference to be drawn from the structure of the SIPC, there is no extrinsic evidence that Congress intended to allow an action such as that before us. As the respondent concedes, there is no indication in the legislative history of the SIPA that Congress ever contemplated a private right of action parallel to that expressly given to the SEC. Additionally, as in Amtrak, it is clear that the overall structure and purpose of the SIPC scheme are incompatible with such an implied right.

Congress’ primary purpose in enacting the SIPA and creating the SIPC was, of course, the protection of investors. It does not follow, however, that an implied right of action by investors who deem themselves to be in need of the Act’s protection, is either necessary to or indeed capable of furthering that purpose.

The SIPC properly treats an application for the appointment of a receiver and liquidation of a brokerage firm as a last resort. It maintains an early-warning system and monitors the affairs of any firm that it is given reason to believe may be in danger of failure. Its experience to date demonstrates that more often than not an endangered firm will avoid collapse by infusion of new capital or merger with a stronger firm. Even failing those alternatives, a firm may be able to liquidate under the supervision of one of the self-regulatory organizations, or the district court, without danger of loss to customers. The SIPC’s policy, therefore, is to defer intervention “until there appear[s] to be no reasonable doubt that customers would need the protection of the Act.” SIPC 1973 Annual Report 7 (1974). By this policy, the SIPC avoids unnecessarily engendering the costs of precipitate liquidations — the costs not only of administering the liquidation, but also of customer illiquidity and additional loss of confidence in the capital markets — without sacrifice of any customer protection that may ultimately prove necessary. A customer, by contrast, cannot be expected to consider, or have adequate information to consider, these public interests in timing his decision to apply to the courts.

The respondent in this case does not, of course, claim any right to make the decision that a firm should be liquidated; the Act makes that a judicial decision. He seeks only the right to ask the District Court to make that decision when both the SIPC and the SEC have refused or simply failed to do so. In practical effect, however, the difference is slight. Except with respect to the solidest of houses, the mere filing of an action predicated upon allegations of financial insecurity might often prove fatal. Other customers could not be expected to leave their cash and securities on deposit, nor other brokers to initiate new transactions that the firm might not be able to cover when due if a receiver is appointed, nor would suppliers be likely to continue dealing with such a firm. These consequences are too grave, and when unnecessary, too inimical to the purposes of the Act, for the Court to impute to Congress an intent to grant to every member of the investing public control over their occurrence. On the contrary, they seem to be the very sorts of considerations that motivated Congress to put the SIPC in the hands of a public board of directors, responsible to an agency experienced in regulation of the securities markets.

We need not pause long over the distinctions between this case and those, such as J. I. Case Co. v. Borak, 377 U. S. 426 (1964), and Allen v. State Board of Elections, 393 U. S. 544 (1969), in which the Court held that an implied private cause of action was maintainable.

In J. I. Case a stockholder sought damages against his corporation for its alleged misrepresentations, violative of § 14 (a) of the Securities Exchange Act of 1934, in soliciting proxy votes for the approval of a merger. In light of the “broad remedial purposes” of the Act and the SEC’s representation that private enforcement was necessary to effectuate those purposes, the Court held that the action for damages could be maintained.

The Court first concluded that it was “clear that private parties have a right under § 27 [of the Act] to bring suit for violation of § 14 (a),” since § 27 specifically granted the district courts jurisdiction over “ ‘all suits in equity and actions at law brought to enforce any liability or duty created’ ” under the Act. 377 U. S., at 430-431. The more difficult question was whether the private parties, once in court, could seek damages as well as equitable relief. On this point, the Court agreed with the SEC that private enforcement of the proxy rules was a necessary supplement to SEC enforcement. Since there was no contrary indication from Congress, the Court so held, relying on the statement from Bell v. Hood, 327 U. S. 678, 684 (1946), that “where legal rights have been invaded, and a federal statute provides for a general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.”

Unlike the Securities Exchange Act, the SIPA contains no standards of conduct that a private action could help to enforce, and it contains no general grant of jurisdiction to the district courts. As in Amtrak, a private right of action under the SIPA would be consistent neither with the legislative intent, nor with the effectuation of the purposes it is intended to serve.

The Allen case arose under the Voting Rights Act of 1965. The question there was whether a private citizen could sue to set aside a state or local election law on the ground of its repugnancy to the Act. The federal statute provided that the Attorney General may bring such suits, but was silent as to the rights of others. It was clear to the Court — and to the Attorney General — that the Act would be practically unenforceable against the many local governments subject to its strictures if only the Attorney General were authorized to sue. We thus found it “consistent with the broad purpose of the Act to allow the individual citizen standing to insure that his city or county government complies with” its requirements. 393 U. S., at 557.

There is not the slightest reason to think that, the SIPA, in contrast to the Voting Rights Act, imposes such burdens on the parties charged with its administration that Congress must either have intended their efforts to be supplemented by those of private investors or enacted a statute incapable of achieving its purpose. Instead of enlisting the aid of investors in achieving that purpose, Congress imposed upon the SEC, the exchanges, and the self-regulatory organizations the obligation to report to the SIPC any situation that might call for its intervention.

For these reasons we are unable to agree with the proposition that the customers of a member broker may sue to compel the SIPC to perform its statutory functions. The judgment of the Court of Appeals is reversed, and the case is remanded to the District Court with instructions that the receiver’s petition for an order to show cause be dismissed.

It is so ordered.

Mb. Justice Douglas dissents.

       Both the Secretary of Transportation, who was given primary responsibility for implementing the law, and spokesmen for organized labor had interpreted the bill as enacted to preclude private actions other than those specifically authorized. The drafting subcommittee to which these views had been expressed found nothing in them to correct.

       See 414 U. S., at 462:
      “If, however, [the Act] were to be interpreted as permitting private lawsuits to prevent the discontinuance of passenger trains, then the only effect of . the Act in this regard would have been to substitute the federal district courts for the state or federal administrative bodies formerly required to pass upon proposed discontinuances.”

       Respondent argues that because Congress provided that the SIPC can “sue and be sued, complain and defend, in its corporate name and through its own counsel, in any court, State, or Federal,” 15 U. S. C. §78cce (b)(1), it must have contemplated occasions when an aggrieved customer of a member firm would be able to sue. In light of the specific terms of the more relevant section governing suits to compel the SIPC to act for the benefit of investors, that conclusion is unwarranted. It is also incompatible with the limitation of SEC actions “to the district court of the United States in which the principal office of SIPC is located.” 15 U. S. C. § 78ggg (b). It would be anomalous for Congress to have centralized SEC suits for the apparent convenience of the SIPC while exposing the corporation to substantively identical suits by investors “in any court, State or Federal.”

       Of the 266 firms brought to the attention of the SIPC by the exchanges, self-regulatory organizations, and the SEC between the effective date of the SIPA and the end of 1973, only 32 were subjected to SIPC liquidation as of December 31, 1973. Sixty-six withdrew from the business of carrying customer accounts, 26 self-liquidated, 20 became inactive without customer loss, 11 merged with other firms, 62 corrected their problems, and 49 remained under surveillance. SIPC 1973 Annual Report 17 (1974).

       See Freeman, Administrative Procedures, 22 Bus. Law. 891, 897 (1967): “The moment you bring a public proceeding against a broker-dealer who depends upon public confidence in his reputation, he is to all intents and purposes out of business.” See sources collected at Freedman, Summary Action by Administrative Agencies, 40 U. Chi. L. Rev. 1, 33 n. 162 (1972), and Gellhorn, Adverse Publicity by Administrative Agencies, 86 Harv. L. Rev. 1380, 1394-1397 (1973). There may, of course, be less reason for public reaction to a private, as opposed to an SEC, suit to compel the SIPC’s protective measures, but there is little reason to think that the investing public, with its assets at risk, would be interested in the distinction.

       The sequence of events giving rise to this case provided no opportunity for a run on Guaranty because the attempt to compel the SIPC’s intervention occurred after the firm had ceased doing business and had come within the jurisdiction of the District Court for liquidation, at the instance of the SEC. In these limited circumstances Congress could reasonably have provided for a private action by a receiver against the SIPC, but it did not and we are not at liberty to do so. There is, after all, a real difference between a court’s implying a right of action to effectuate the purposes of a statute and its cutting a code of procedure out of whole cloth.

       The SEC suggests in its brief that a determination by it not to proceed against the SIPC with respect to a member broker-dealer whose customers have incurred a loss of the type against which the SIPA is directed might be reviewable under the Administrative Procedure Act for an abuse of discretion. We need express no opinion on that matter today.