author: Justice Marshall

text:
    JOHNSON v. HOME STATE BANK
    No. 90-693.
    Argued April 16, 1991
    Decided June 10, 1991

      W. Thomas Gilman argued the cause for petitioner. With him on the briefs were Martin R. Ufford, Patricia A. Gil-man, Edward J. Nazar, Laurie B. Williams, Mary Patricia Hesse, and Matthew C. Hesse.

      Calvin D. Rider argued the cause for respondent. With him on the brief were Patricia M. Dengler and Robert C. Brown.

         David A. Searles, Henry J. Sommer, Eric L. Frank, and Mitchell W. Miller filed a brief for the Consumers Education and Protective Association, Inc., et al. as amici curiae urging reversal.
      Briefs of amici curiae urging affirmance were filed for the American Bankers Association by John J. Gill III and Michael F. Crotty; and for the Kansas Bankers Association by Anne L. Baker and Charles N. Henson.

   Justice Marshall

delivered the opinion of the Court.

The issue in this case is whether a debtor can include a mortgage lien in a Chapter 13 bankruptcy reorganization plan once the personal obligation secured by the mortgaged property has been discharged in a Chapter 7 proceeding. We hold that the mortgage lien in such a circumstance remains a “claim” against the debtor that can be rescheduled under 13.

I

This case arises from the efforts of respondent Home State Bank (Bank) to foreclose a mortgage on the farm property of petitioner. Petitioner gave the mortgage to secure promissory notes to the Bank totaling approximately $470,000. When petitioner defaulted on these notes, the Bank initiated foreclosure proceedings in state court. During the pendency of these proceedings, petitioner filed for a liquidation under Chapter 7 of the Bankruptcy Code. Pursuant to 11 U. S. C. § 727, the Bankruptcy Court discharged petitioner from personal liability on his promissory notes to the Bank. Notwithstanding the discharge, the Bank’s right to proceed against petitioner in rem survived the Chapter 7 liquidation. After the Bankruptcy Court lifted the automatic stay protecting petitioner’s estate, see 11 U. S. C. §362, the Bank reinitiated the foreclosure proceedings. Ultimately, the state court entered an in rem judgment of approximately $200,000 for the Bank.

Before the foreclosure sale was scheduled to take place, petitioner filed the Chapter 13 petition at issue here. In his Chapter 13 plan, petitioner listed the Bank’s mortgage in the farm property as a claim against his estate and proposed to pay the Bank four annual installments and a final “balloon payment” equal in total value to the Bank’s in rem judgment. Over the Bank’s objection, the Bankruptcy Court confirmed the Chapter 13 plan. The Bank appealed to the District Court, arguing that the Code does not allow a debtor to include in a Chapter 13 plan a mortgage used to secure an obligation for which personal liability has been discharged in Chapter 7 proceedings; the Bank argued in the alternative that the Bankruptcy Court had erred in finding that petitioner had proposed the plan in good faith and that the plan was feasible. The District Court accepted the first of these arguments and disposed of the case on that ground. See In re Johnson, 96 B. R. 326, 328-330 (Kan. 1989).

The Court of Appeals affirmed. See 904 F. 2d 563 (CA10 1990). Emphasizing that petitioner’s personal liability on the promissory notes secured by the mortgage had been discharged in the Chapter 7 proceedings, the court reasoned that the Bank no longer had a “claim” against petitioner subject to rescheduling under Chapter 13. See id., at 565, 566. Like the District Court, the Court of Appeals disposed of the case without considering the Bank’s contentions that Johnson’s plan was not in good faith and was not feasible. See id., at 566.

In contrast to the decision of the Tenth Circuit in this case, two other Circuit Courts of Appeals have concluded that a debtor can include a mortgage lien in a Chapter 13 plan even after the debtor’s personal liability on the debt secured by the property has been discharged in a Chapter 7 liquidation. See In re Saylors, 869 F. 2d 1434, 1436 (CA11 1989); In re Metz, 820 F. 2d 1495, 1498 (CA9 1987). Having granted cer-tiorari to resolve this conflict, see 498 U. S. 1066 (1991), we now reverse.

M HH

Chapter 13 of the Bankruptcy Code provides a reorganization remedy for consumer debtors and proprietors with relatively small debts. See generally H. R. Rep. No. 95-595, pp. 116-119 (1977). So long as a debtor meets the eligibility requirements for relief under Chapter 13, see 11 U. S. C. § 109(e), he may submit for the bankruptcy court’s confirmation a plan that “modif [ies] the rights of holders of secured claims . . . or . . . unsecured claims,” § 1322(b)(2), and that “provide[s] for the payment of all or any part of any [allowed] claim,” § 1322(b)(6). The issue in this case is whether a mortgage lien that secures an obligation for which a debtor’s personal liability has been discharged in a Chapter 7 liquidation is a “claim” subject to inclusion in an approved Chapter 13 reorganization plan.

To put this question in context, we must say more about the nature of the mortgage interest that survives a Chapter 7 liquidation. A mortgage is an interest in real property that secures a creditor’s right to repayment. But unless the debtor and creditor have provided otherwise, the creditor ordinarily is not limited to foreclosure on the mortgaged property should the debtor default on his obligation; rather, the creditor may in addition sue to establish the debt- or’s in personam liability for any deficiency on the debt and may enforce any judgment against the debtor’s assets generally. See 3 R. Powell, The Law of Real Property ¶ 467 (1990). A defaulting debtor can protect himself from personal liability by obtaining a discharge in a Chapter 7 liquidation. See 11 U. S. C. § 727. However, such a discharge extinguishes only “the personal liability of the debtor.” 11 U. S. C. § 524(a)(1). Codifying the rule of Long v. Bullard, 117 U. S. 617 (1886), the Code provides that a creditor’s right to foreclose on the mortgage survives or passes through the bankruptcy. See 11 U. S. C. § 522(c)(2); Owen v. Owen, 500 U. S. 305, 308-309 (1991); Farrey v. Sanderfoot, 500 U. S. 291, 297 (1991); H. R. Rep. No. 95-595, supra, at 361.

Whether this surviving mortgage interest is a “claim” subject to inclusion in a Chapter 13 reorganization plan is a straightforward issue of statutory construction to be resolved by reference to “the text, history, and purpose” of the Bankruptcy Code. Farrey v. Sanderfoot, supra, at 298. Under the Code,

“‘[CJlaim’ means—
“(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or
“(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.” 11 U. S. C. § 101(5) (1988 ed., Supp. III).

We have previously explained that Congress intended by this language to adopt the broadest available definition of “claim.” See Pennsylvania Dept. of Public Welfare v. Davenport, 495 U. S. 552, 558, 563-564 (1990); see also Ohio v. Kovacs, 469 U. S. 274, 279 (1985). In Davenport, we concluded that “ ‘right to payment’ [means] nothing more nor less than an enforceable obligation . . . .” 495 U. S., at 559.

Applying the teachings of Davenport, we have no trouble concluding that a mortgage interest that survives the discharge of a debtor’s personal liability is a "claim” within the terms of § 101(5). Even after the debtor’s personal obligations have been extinguished, the mortgage holder still retains a “right to payment” in the form of its right to the proceeds from the sale of the debtor’s property. Alternatively, the creditor’s surviving right to foreclose on the mortgage can be viewed as a “right to an equitable remedy” for the debtor’s default on the underlying obligation. Either way, there can be no doubt that the surviving mortgage interest corresponds to an “enforceable obligation” of the debtor.

The Court of Appeals thus erred in concluding charge of petitioner’s personal liability on his promissory notes constituted the complete termination of the Bank’s claim against petitioner. Rather, a bankruptcy discharge extinguishes only one mode of enforcing a claim — namely, an action against the debtor in personam — while leaving intact another — namely, an action against the debtor in rem. Indeed, but for the codification of the rule of Long v. Bullard, supra, there can be little question that a “discharge” under Chapter 7 would have the effect of extinguishing the in rem component as well as the in personam component of any claim against the debtor. And because only “claims” are discharged under the Code, the very need to codify Long v. Bullard presupposes that a mortgage interest is otherwise a “claim.”

The conclusion that a surviving mortgage interest is a “claim” under § 101(5) is consistent with other parts of the Code. Section 502(b)(1), for example, states that the bankruptcy court “shall determine the amount of [a disputed] claim . . . and shall allow such claim in such amount, except to the extent that. . . such claim is unenforceable against the debtor and property of the debtor” (emphasis added). In other words, the court must allow the claim if it is enforceable against either the debtor or his property. Thus, § 502(b)(1) contemplates circumstances in which a “claim,” like the mortgage lien that passes through a Chapter 7 proceeding, may consist of nothing more than an obligation enforceable against the debtor’s property. Similarly, § 102(2) establishes, as a “[r]ul[e] of construction,” that the phrase “ ‘claim against the debtor’ includes claim against property of the debtor.” A fair reading of § 102(2) is that a creditor who, like the Bank in this case, has a claim enforceable only against the debtor’s property nonetheless has a “claim against the debtor” for purposes of the Code.

The legislative background and history of the Code confirm this construction of “claim.” Although the pre-1978 Bankruptcy Act contained no single definition of “claim,” the Act did define “claim” as “including] all claims of whatever character against a debtor or its property” for purposes of Chapter X corporate reorganizations. See 11 U. S. C. § 506(1) (1976 ed.) (emphasis added). It is clear that Congress so defined “claim” in order to confirm that creditors with interests enforceable only against the property of the debtor had “claims” for purposes of Chapter X, see S. Rep. No. 1916, 75th Cong., 3d Sess., 25 (1938); H. R. Rep. No. 1409, 75th Cong., 1st Sess., 39 (1937), and such was the established understanding of the lower courts. See generally 6 J. Moore & L. King, Collier on Bankruptcy ¶ 2.05, pp. 307-308 (14th ed. 1978) ("[I]t is to be noted that a claim against the debtor’s property alone is sufficient” for Chapter X). In fashioning a single definition of “claim” for the 1978 Bankruptcy Code, Congress intended to “adop[t] an even broader definition of claim than [was] found in the [pre-1978 Act’s] debtor rehabilitation chapters.” H. R. Rep. No. 95-595, at 309 (emphasis added); accord, S. Rep. No. 95-989, pp. 21-22 (1978); see also Pennsylvania Dept. of Public Welfare v. Davenport, supra, at 558, 563-564 (recognizing that Congress intended broadest available definition of claim). Presuming, as we must, that Congress was familiar with the prevailing understanding of “claim” under Chapter X of the Act, see Cottage Savings Assn. v. Commissioner, 499 U. S. 554, 562 (1991); Cannon v. University of Chicago, 441 U. S. 677, 698-699 (1979), we must infer that Congress fully expected that an obligation enforceable only against a debtor’s property would be a “claim” under § 101(5) of the Code.

The legislative history surrounding § 102(2) directly corroborates this inference. The Committee Reports accompanying § 102(2) explain that this rule of construction contemplates, inter alia, “nonrecourse loan agreements where the creditor’s only rights are against property of the debtor, and not against the debtor personally.” H. R. Rep. No. 95-595, supra, at 315; accord, S. Rep. No. 95-989, supra, at 28. Insofar as the mortgage interest that passes through a Chapter 7 liquidation is enforceable only against the debtor’s property, this interest has the same properties as a nonrecourse loan. It is true, as the Court of Appeals noted, that the debtor and creditor in such a case did not conceive of their credit agreement as a nonrecourse loan when they entered it. See 904 F. 2d, at 566. However, insofar as Congress did not expressly limit § 102(2) to nonrecourse loans but rather chose general language broad enough to encompass such obligations, we understand Congress’ intent to be that § 102(2) extend to all interests having the relevant attributes of non-recourse obligations regardless of how these interests come into existence.

The Bank resists this analysis. It contends that even if an obligation enforceable only against the debtor’s property might normally be treated as a “claim” subject to inclusion in a Chapter 13 plan, such an obligation should not be deemed a claim against the debtor when it is merely the remainder of an obligation for which the debtor’s personal liability has been discharged in a Chapter 7 liquidation. Serial filings under Chapter 7 and Chapter 13, respondent maintains, evade the limits that Congress intended to place on these remedies.

We disagree. Congress has expressly prohibited various forms of serial filings. See, e. g., 11 U. S. C. § 109(g) (no filings within 180 days of dismissal); § 727(a)(8) (no Chapter 7 filing within six years of a Chapter 7 or Chapter 11 filing); § 727(a)(9) (limitation on Chapter 7 filing within six years of Chapter 12 or Chapter 13 filing). The absence of a like prohibition on serial filings of Chapter 7 and Chapter 13 petitions, combined with the evident care with which Congress fashioned these express prohibitions, convinces us that Congress did not intend categorically to foreclose the benefit of Chapter 13 reorganization to a debtor who previously has filed for Chapter 7 relief. Cf. United States v. Smith, 499 U. S. 160, 167 (1991) (expressly enumerated exceptions presumed to be exclusive).

The Bank’s contention also fails to apprehend the significance of the full range of Code provisions designed to protect Chapter 13 creditors. A bankruptcy court is authorized to confirm a plan only if the court finds, inter alia, that “the plan has been proposed in good faith,” § 1325(a)(3); that the plan assures unsecured creditors a recovery as adequate as “if the estate of the debtor were liquidated under chapter 7,” § 1325(a)(4); that secured creditors either have “accepted the plan,” obtained the property securing their claims, or “re-tainted] the[ir] lien[s]” where “the value ... of property to be distributed under the plan ... is not less than the allowed amount of such claim[s],” § 1325(a)(5); and that “the debtor will be able to make all payments under the plan and to comply with the plan,” § 1325(a)(6). In addition, the bankruptcy court retains its broad equitable power to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Code.]” § 105(a). Any or all of these provisions may be implicated when a debtor files serially under Chapter 7 and Chapter 13. But given the availability of these provisions, and given Congress’ intent that “claim” be construed broadly, we do not believe that Congress intended the bankruptcy courts to use the Code’s definition of “claim” to police the Chapter 13 process for abuse.

f — I I — I

The Bank renews here its claim that the Bankruptcy Court erred in finding petitioner’s plan to be in good faith for purposes of § 1325(a)(3) and feasible for purposes of § 1325(a)(6) of the Code. Because the District Court and Court of Appeals disposed of this case on the ground that the Bank’s mortgage interest was not a “claim” subject to inclusion in a Chapter 13 plan, neither court addressed the issues of good faith or feasibility. We also decline to address these issues and instead leave them for consideration on remand.

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

       At the time at which the mortgage was executed, petitioner co-owned the property in question. However, by the time petitioner filed the Chapter 13 petition at issue in this case, he had acquired his wife’s interest in the property. In addition, although petitioner’s wife was a party in various of the proceedings surrounding disposition of the property, for simplicity we refer only to petitioner’s role in these proceedings.

       During the course of the proceedings, the Bank acquired from another creditor a superior mortgage interest in petitioner’s property.

         Section 109(e) states:
      “Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $100,000 and noncontingent, liquidated, secured debts of less than $350,000, or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts that aggregate less than $100,000 and noncontingent, liquidated, secured debts of less than $350,000 may be a debtor under chapter 13 of this title.”

       Using this definition, we held in Davenport that restitution orders imposed as a condition of probation in state criminal proceedings were “claims” dischargeable in a Chapter 13 reorganization. See 495 U. S., at 558-560. Congress subsequently overruled the result in Davenport. See Criminal Victims Protection Act of 1990, Pub. L. 101-581, § 3, 104 Stat. 2865. It did so, however, by expressly withdrawing the Bankruptcy Court’s power to discharge restitution orders under 11 U. S. C. § 1328(a), not by restricting the scope of, or otherwise amending, the definition of “claim” under § 101(5). Consequently, we do not view the Criminal Victims Protection Act as disturbing our general conclusions on the breadth of the definition of “claim” under the Code.

       A bankruptcy discharge extinguishes “the personal liability of the debtor with respect to any debt.” 11 U. S. C. § 524(a)(1) (emphasis added). As we explained in Davenport, “debt,” which is defined under the Code as “liability on a claim,” 11 U. S. C. § 101(12) (1988 ed., Supp. III), has a meaning coextensive with that of “claim” as defined in § 101(5). Pennsyl

        vania Dept. of Public Welfare v. Davenport, supra, at 558. Hence, a discharge under the Code extinguishes the debtor’s personal liability on his creditor’s claims.


source: Caselaw Access Project

author: Justice O’Connor

license: Public Domain

text:
    MELKONYAN v. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES
    No. 90-5538.
    Argued April 15, 1991
    Decided June 10, 1991

      Brian Wolfman argued the cause for petitioner. With him on the briefs were Alan B. Morrison, Patti A. Goldman, and John Ohanian.

      Clifford M. Sloan argued the cause for respondent. On the brief were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Shapiro, Edwin S. Kneedler, and William Ranter.

   Justice O’Connor

delivered the opinion of the Court.

A party that prevails against the United States in a civil action is entitled, in certain circumstances, to an award of attorney’s fees, court costs, and other expenses. Equal Access to Justice Act (EAJA), 28 U. S. C. § 2412. Among other requirements, the prevailing party must submit to the court an application for fees and expenses “within thirty days of final judgment in the action.” § 2412(d)(1)(B). This case requires us to decide whether an administrative decision rendered following a remand from the District Court is a “final judgment” within the meaning of EAJA.

I — I

In May 1982, petitioner Zakhar Melkonyan filed an application for disability benefits under the Supplemental Security Income (SSI) program established by Title XVI of the Social Security Act, 86 Stat. 1465, as amended, 42 U. S. C. § 1381 et seq. Following a hearing, an Administrative Law Judge (ALJ) concluded that petitioner was not disabled within the meaning of the Act. The Appeals Council denied review of the ALJ’s decision. In June 1984, petitioner timely filed a complaint in the United States District Court for the Central District of California, seeking judicial review pursuant to 42 U. S. C. § 1383(c)(3), which incorporates the review provisions of 42 U. S. C. § 405(g).

On May 30, 1984, shortly tioner filed a second application for SSI disability benefits accompanied by new evidence of disability. In August 1984, petitioner’s second application was approved as of the date it was filed. He then sought summary judgment in his action to review the administrative decision denying his first application for benefits. The Secretary cross-filed for summary judgment.

While the summary Secretary requested that the case be remanded to the Appeals Council so the first application could be reconsidered in light of the new evidence. Petitioner initially opposed the Secretary’s remand request, arguing that evidence already in the record amply established his disability. Three months later, however, citing failing health and the prospect of increased medical expenses, petitioner moved the court to “either issue [the decision] or remand the cause to the Secretary.” App. 9-10. In response, on April 3, 1985, the District Court entered a “judgment” which read in its entirety:

“Defendant’s motion to remand, concurred in by plaintiff, is granted. The matter is remanded to the Secretary for all further proceedings.” App. 11. sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

One month after the remand, the Appeals Council vacated the ALJ’s prior decision and found petitioner disabled as of the date of his original SSI application. That decision granted petitioner all the relief he had initially requested.

More than a year later, petitioner Court for attorney’s fees under EAJA. The Magistrate recommended that the fee application be denied, concluding that the Secretary’s decision to deny the first application was “substantially justified” at the time because the original record did not establish that petitioner was disabled. App. 20-21. The District Court agreed and denied the fee request.

The Court of Appeals for the Ninth Circuit vacated the District Court’s judgment. It agreed that petitioner was not eligible for attorney’s fees under EAJA, but for a different reason. Melkonyan v. Heckler, 895 F. 2d 556 (1990). The Court of Appeals noted that EAJA requires an application for fees to be filed within 30 days of the “ ‘final judgment in the action,”’ a term defined in the statute as a “‘judgment that is final and not appealable.’” Id., at 557 (quoting 28 U. S. C. § 2412(d)(2)(G)). In the court’s view, its task was to determine when that “final and not appealable” judgment was rendered. 895 F. 2d, at 557.

The Court of Appeals recognized that the District Court’s order remanding the case to the Secretary was not a “final judgment” because both parties anticipated further administrative proceedings. Id., at 557-558. On remand, the Appeals Council reversed itself and held for petitioner; having won all he had asked for, there was no reason to return to the District Court. Under those circumstances, the Court of Appeals concluded that the Appeals Council’s decision to award benefits was, in effect, a “final judgment” under EAJA, thereby commencing the 30-day period for filing the fee application. Id., at 558-559. Because petitioner waited more than a year after the Appeals Council’s decision, his application was untimely. Id., at 559. We granted certio-rari, 498 U. S. 1023 (1991), and now vacate the judgment of the Court of Appeals.

II

As relevant to this case, EAJA provides:

“(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, ... incurred by that party in any civil action (other than cases
“(B) A party seeking an penses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection” 28 U. S. C. §§ 2412(d)(1)(A), (B) (emphasis added).

Petitioner argues that this provision is most naturally read to mean that it is the court before which the civil action is pending that must render the “final judgment” that starts the running of the 30-day E AJA filing period. Brief for Petitioner 13. We agree. As the highlighted language indicates, subsections (d)(1)(A) and (d)(1)(B) work in tandem. Subsection (d)(1)(A) authorizes the awarding of fees to parties that prevail against the United States in nontort civil actions, subject to qualifications not pertinent here. Subsection (d)(1)(B) explains what the prevailing party must do to secure the fee award. The requirement that the fee application be filed within 30 days of “final judgment in the action” plainly refers back to the “civil action ... in any court” in (d)(1)(A). The plain language makes clear that a “final judgment” under § 2412 can only be the judgment of a court of law. This reading is reinforced by the contrast between § 2412 and 5 U. S. C. § 504(a). Section 504 was enacted at the same time as § 2412, and is the only part of the EAJA that allows fees and expenses for administrative proceedings conducted prior to the filing of a civil action. The pertinent language of § 504(a)(2) largely mirrors that of § 2412(d)(1)(B), with one notable exception: It states that a “party seeking an award of fees and other expenses shall, within thirty days of a final disposition in the adversary adjudication, ” file an application for fees. 5 U. S. C. § 504(a)(2) (emphasis added). Clearly Congress knew how to distinguish between a “final judgment in [an] action” and a “final disposition in [an] adversary adjudication.” One is rendered by a court; the other includes adjudication by an administrative agency.

The Secretary’s sole argument to the contrary rests on the 1985 amendments to EAJA, which added a definition of “final judgment” to § 2412. Traditionally, a “final judgment” is one that is final and appealable. See Fed. Rule Civ. Proc. 54(a) (“ ‘Judgment’ as used in these rules includes a decree and any order from which an appeal lies”); Sullivan v. Finkelstein, 496 U. S. 617, 628 (1990) (“‘[F]inal judgments’ are at the core of matters appealable under § 1291”). Under § 2412, as amended, however, a “final judgment” is one that is “final and not appealable.” 28 U. S. C. § 2412(d)(2)(G) (emphasis added). In the Secretary’s view, “[t]his significant departure from the usual characteristic] of a ‘judgment’ entered by a court” dictates a different understanding of how the phrase “final judgment” is used in § 2412(d)(1)(B). Brief for Respondent 20. The Secretary argues that under the revised statute, a “final judgment” includes not only judgments rendered by a court, but also decisions made by administrative agencies. Ibid.

We reject this argument. Section 2412(d)(1)(B) does not speak merely of a “judgment”; it speaks of a “final judgment in the action.” As we have explained, the “action” referred to in subsection (d)(1)(B) is a “civil action ... in any court” under subsection (d)(1)(A). The Secretary’s suggested interpretation of “final judgment” does not alter this unambiguous requirement of judgment by a court.

As for why Congress added the unusual definition of “final judgment,” the answer is clear. “The definition . . . was added in 1985 to resolve a conflict in the lower courts on the question whether a ‘judgment’ was to be regarded as ‘final’ for EAJA purposes when it was entered, or only when the period for taking an appeal had lapsed.” Brief for Respondent 20 (footnote omitted). The Ninth Circuit had held that the 30-day EAJA filing period began to run when the district court entered judgment. McQuiston v. Marsh, 707 F. 2d 1082, 1085 (1983). The Seventh Circuit rejected this view, holding that the EAJA filing period should be deemed to begin only after the time for taking an appeal from the district court judgment had expired. McDonald v. Schweiker, 726 F. 2d 311, 314 (1983). Accord, Massachusetts Union of Public Housing Tenants, Inc. v. Pierce, 244 U. S. App. D. C. 34, 36, 755 F. 2d 177, 179 (1985).

Congress responded to this split in the federal courts by explicitly adopting and ratifying the McDonald approach. S. Rep. No. 98-586, p. 16 (1984) (“The Committee believes that the interpretation of the court in [McDonald] is the correct one”). See also H. R. Rep. No. 98-992, p. 14 (1984) (“The term ‘final judgment' has been clarified to mean a judgment the time to appeal which has expired for all parties”); H. R. Rep. No. 99-120, p. 18 (1985). There simply is no evidence to support the argument the Secretary now advances — that, in defining “final judgment” so as to resolve an existing problem, Congress also intended, sub silentio, to alter the meaning of the term to include-a final agency decision. We conclude that, notwithstanding the 1985 amendment, Congress’ use of “judgment” in 28 U. S. C. §2412 refers to judgments entered by a court of law, and does not encompass decisions rendered by an administrative agency. Accordingly, we hold that a “final judgment” for purposes of 28 U. S. C. § 2412(d)(1)(B) means a judgment rendered by a court that terminates the civil action for which EAJA fees may be received. The 30-day EAJA clock begins to run after the time to appeal that “final judgment” has expired.

Our decision in Sullivan v. Hudson, 490 U. S. 877 (1989), is not to the contrary. The issue in Hudson was whether, under § 2412(d), a “civil action” could include administrative proceedings so that a claimant could receive attorney’s fees for work done at the administrative level following a remand by the district court. We explained that certain administrative proceedings are “so intimately connected with judicial proceedings as to be considered part of the ‘civil action’ for purposes of a fee award.” Id., at 892. We defined the narrow class of qualifying administrative proceedings to be those “where ‘a suit [has been] brought in a court,’ and where ‘a formal complaint within the jurisdiction of a court of law’ remains pending and depends for its resolution upon the outcome of the administrative proceedings.” Ibid. (emphasis added). Hudson thus stands for the proposition that in those cases where the district court retains jurisdiction of the civil action and contemplates entering a final judgment following the completion of administrative proceedings, a claimant may collect EAJA fees for work done at the administrative level. Ibid. “We did not say that proceedings on remand to an agency are ‘part and parcel’ of a civil action in federal district court for all purposes . . . .” Sullivan v. Finkelstein, supra, at 630-631.

HH b — I 1 — 1

Having decided that EAJA requires a final judgment” entered by a court, it is obvious that no “final judgment” was entered in this case before petitioner initiated his appeal. Petitioner filed a civil action in the District Court under 42 U. S. C. § 405(g), seeking review of the Secretary’s decision that he was not entitled to disability benefits. Without ruling on the correctness of the Secretary’s decision, the District Court remanded the case for further administrative proceedings. On remand, the Appeals Council awarded petitioner the disability benefits he sought. Neither petitioner nor the Secretary returned to the District Court for entry of a final judgment. The question we must decide now is whether either party is entitled to do so.

The answer depends on what kind of remand the District Court contemplated. In Finkelstein, we examined closely the language of § 405(g) and identified two kinds of remands under that statute: (1) remands pursuant to the fourth sentence, and (2) remands pursuant to the sixth sentence. See 496 U. S., at 623-629. The fourth sentence of § 405(g) authorizes a court to enter “a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing.” The parties agree that the remand order in this case was not entered pursuant to sentence four, as the District Court did not affirm, modify, or reverse the Secretary’s decision. We concur. The District Court did not make any substantive ruling; it merely returned the case to the agency for disposition, noting that both parties agreed to this course.

The sixth sentence of § 405(g), as we stein, “describes an entirely different kind of remand.” Id., at 626. The district court does not affirm, modify, or reverse the Secretary’s decision; it does not rule in any way as to the correctness of the administrative determination. Rather, the court remands because new evidence has come to light that was not available to the claimant at the time of the administrative proceeding and that evidence might have changed the outcome of the prior proceeding. Ibid. The statute provides that following a sentence six remand, the Secretary must return to the district court to “file with the court any such additional or modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.” 42 U. S. C. § 405(g).

Petitioner argues, plausibly, that the court contemplated a sentence six remand. Indeed, it is undisputed that it was consideration of later-acquired evidence that led the Appeals Council ultimately to reverse its earlier decision and declare petitioner eligible for benefits from the date of his original application. Petitioner further argues that this must have been a sentence six remand because § 405(g) authorizes only two kinds of remands — those pursuant to sentence four and those pursuant to sentence six — and the Secretary concedes that this was not a sentence four remand.

The Secretary maintains that this was not a sentence six remand. While acknowledging that the remand request was prompted by the discovery of new evidence of disability, see Brief for Respondent 27-28, the Secretary observes correctly that the sixth sentence of § 405(g) requires a showing of “good cause” for the failure to present the additional evidence in the prior proceeding and that the District Court did not rule explicitly that such a showing had been made. The Secretary also notes that the District Court did not manifest any intent to retain jurisdiction, as would be the case under sentence six, but rather remanded to the agency “for all further proceedings.”

The Secretary also disputes petitioner’s assumption that sentences four and six set forth the only kinds of remands that are permitted under § 405(g), arguing that the district court has inherent authority to enter other types of remand orders. Id., at 28-29, n. 23. On this point, we think petitioner has the better of the argument. As mentioned, in Finkelstein we analyzed § 405(g) sentence by sentence and identified two kinds of possible remands under the statute. While we did not state explicitly at that time that these were the only kinds of remands permitted under the statute, we do so today. Under sentence four, a district court may remand in conjunction with a judgment affirming, modifying, or reversing the Secretary’s decision. Under sentence six, the district court may remand in light of additional evidence without making any substantive ruling as to the , correctness of the Secretary’s decision, but only if the claimant shows good cause for failing to present the evidence earlier. Congress’ explicit delineation in § 405(g) regarding the circumstances under which remands are authorized leads Us to conclude that it intended to limit the district courts’ authority to enter remand orders to these two types. Cf. United States v. Smith, 499 U. S. 160 (1991) (expressly enumerated exceptions presumed to be exclusive).

This reading of the of § 405(g) and is supported by the legislative history. In amending the sixth sentence of § 405(g) in 1980, Congress made it unmistakably clear that it intended to limit the power of district courts to order remands for “new evidence” in Social Security cases. Pub. L. 96-265, § 307, 94 Stat. 458. The Senate Report accompanying the amendments explained:

“[U]nder existing law the court itself, on its own or on motion of the claimant, has discretionary authority ‘for good cause’ to remand the case back to the ALJ. It would appear that, although many of these court remands are justified, some remands are undertaken because the judge disagrees with the outcome of the case even though he would have to sustain it under the ‘substantial evidence rule.’ Moreover, the number of these court remands seems to be increasing. . . . The bill would continue the provision of present law which gives the court discretionary authority to remand cases to the Secretary, but adds the requirement that remand for the purpose of taking new evidence be limited to cases in which there is a showing that there is new evidence which is material and that there was good cause for failure to incorporate it into the record in a prior proceeding.” S. Rep. No. 96-408, pp. 58-59 (1979) (emphasis added).

See also H. R. Rep. No. 96-100, p. 13 (1979) (same).

Congressman Pickle, one of the floor managers of the bill, echoed this explanation when he noted in a floor statement that with the amendment “we have tried to speed up the judicial process so that these cases would not just go on and on and on. The court could remand [them] back down to the AL J without cause or other reason which was weakening the appeal process at that level.” 125 Cong. Rec. 23383 (1979).

The amendment to sentence six, of course, was not intended to limit a district court’s ability to order remands under sentence four. The House Report explains that “[t]his language [amending sentence six] is not to be construed as a limitation of judicial remands currently recognized under the law in cases which the Secretary has failed to provide a full and fair hearing, to make explicit findings, or to have correctly apply [sic] the law and regulations.” H. R. Rep. No. 96-100, supra, at 13. Thus, under sentence four, a district court may still remand in conjunction with a judgment reversing in part the Secretary’s decision.

It is evident from these passages that Congress believed courts were often remanding Social Security cases without good reason. While normally courts have inherent power, among other things, to remand cases, see United States v. Jones, 336 U. S. 641, 671 (1949), both the structure of § 405(g), as amended, and the accompanying legislative history show Congress’ clear intent to limit courts to two kinds of remands in these cases. Cf. Chambers v. NASCO, Inc., ante, p. 32 (finding no congressional intent to limit a court’s inherent authority to impose sanctions).

light of the foregoing, we conclude that in § 405(g) actions, remand orders must either accompany a final judgment affirming, modifying, or reversing the administrative decision in accordance with sentence four, or conform with the requirements outlined by Congress in sentence six. Construing remand orders in this manner harmonizes the remand provisions of § 405(g) with the EAJA requirement that a “final judgment” be entered in the civil action in order to trigger the EAJA filing period. 28 U. S. C. § 2412(d)(1)(B). In sentence four cases, the filing period begins after the final judgment (“affirming, modifying, or reversing”) is entered by the court and the appeal period has run, so that the judgment is no longer appealable. See § 2412(d)(2)(G). In sentence six cases, the filing period does not begin until after the postremand proceedings are completed, the Secretary returns to court, the court enters a final judgment, and the appeal period runs.

Although we agree with petitioner that the district court’s remand authority is confined to those circumstances specifically defined in § 405(g), we cannot state with certainty that the remand in this case was, as petitioner contends, a sentence six remand. As the Secretary points out, the District Court did not make a finding that “good cause” had been shown, nor did the court seem to anticipate that the parties would return to court following the administrative proceedings. Indeed, it may be that the court treated the joint request for remand as a voluntary dismissal under Federal Rule of Civil Procedure 41(a), although the parties did not file a signed stipulation, as required by the Rule. Because the record before us does not clearly indicate what the District Court intended by its disposition, we vacate the judgment and remand the matter to enable the District Court to clarify its order. If petitioner is correct that the court remanded the case under sentence six, the Secretary must return to District Court, at which time the court will enter a final judgment. Petitioner will be entitled to EAJA fees unless the Secretary’s initial position was substantially justified, a question which was not addressed by the Court of Appeals. If, on the other hand, this was not a sentence six remand, it may be that petitioner is not entitled to EAJA fees at all. For example, if the court’s order was, in effect, a dismissal under Rule 41(a), the District Court’s jurisdiction over the case would have ended at that point, and petitioner would not have been a prevailing party “in [a] civil action.” 28 U. S. C. § 2412(d)(1)(A). Under those circumstances, the Secretary would not return to the District Court and petitioner would not be eligible to receive EAJA fees.

IV

At oral argument the parties discussed the timeliness of petitioner’s fee application. EAJA requires prevailing parties seeking an award of fees to file with the court, “within thirty days of final judgment in the action,” an application for fees and other expenses. § 2412(d)(1)(B) (emphasis added). Petitioner claims that this language permits him to apply for fees at any time up to 30 days after entry of judgment, and even before judgment is entered, as long as he has achieved prevailing party status. Tr. of Oral Arg. 16-18.

This case is not an appropriate vehicle for resolving the issue. If petitioner is correct that this was a sentence six remand, the District Court may determine that the application he has already filed is sufficient. Alternatively, petitioner can easily reapply for EAJA fees following the District Court’s entry of a final judgment. In either case, petitioner will not be prejudiced by having filed prematurely. On the other hand, if this was not a sentence six remand, we have already explained that petitioner would not be entitled to fees, so the timeliness of the application will not be an issue.

The judgment of the Ninth Circuit Court of Appeals is vacated, and the case is remanded to the Court of Appeals with instructions to remand to the District Court for further proceedings consistent with this opinion.

It is so ordered.

       Sentence six of § 405(g) provides in full:
      . “The court may, on motion of the Secretary made for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary, and it may at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.”

         Sentence six also authorizes the district court to remand on motion by the Secretary made before the Secretary has filed a response in the action. That subcategory of sentence six remands is not implicated in this case.


author: Justice Souter

text:
    ASTORIA FEDERAL SAVINGS & LOAN ASSOCIATION v. SOLIMINO
    No. 89-1895.
    Argued April 17, 1991
    Decided June 10, 1991

      Paul J. Siegel argued the cause for petitioner. With him on the brief were Roger S. Kaplan and Anthony H. Atlas.

      Leonard N. Flamm argued the cause for respondent. With him on the brief was Joseph J. Gentile.

      Amy L. Wax argued the cause pro hac vice for the United States as amicus curiae urging affirmance. On the brief were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Roberts, Robert A. Long, Jr., Donald R. Livingston, Gwendolyn Young Reams, and Lamont N. White.

       Briefs of amici curiae urging reversal were filed for the Atlantic Legal Foundation by Martin S. Kaufman and Douglas Foster; and for the Equal Employment Advisory Council by Robert E. Williams and Douglas S. McDowell.

      Briefs of amici curiae urging affirmance were filed for the New York State Division of Human Rights by Robert Abrams, Attorney General, 0. Peter Sherwood, Solicitor General, and Sanford M. Cohen and Marjorie

        Fujiki, Assistant Attorneys General; and for the American Association of Retired Persons by Cathy Ventrell-Monsees.

   Justice Souter

delivered the opinion of the Court.

The question presented is whether claimants under the Age Discrimination in Employment Act of 1967 (Age Act or Act), 81 Stat. 602, as amended, 29 U. S. C. § 621 et seq., are collaterally estopped to relitigate in federal court the judicially unreviewed findings of a state administrative agency made with respect to an age-discrimination claim. We hold that such findings have no preclusive effect on federal proceedings.

Respondent Angelo Solimino had worked for petitioner Astoria Federal Savings and Loan Association for almost 40 years when at age 63 he was dismissed from his position as a vice president in the mortgage department. Less than two weeks later, on March 18, 1982, he filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC). Under a worksharing agreement between it and the state agency, see 29 CFR § 1626.10 (1990), the EEOC referred.the matter to the New York State Division of Human Rights, which is responsible for preliminary investigation and disposition of age-discrimination cases under New York’s Human Rights Law. On January 25, 1983, after a hearing at which both parties were represented by counsel, the state agency found no probable cause to believe that petitioner had terminated respondent because of his age. The ruling was affirmed on review for abuse of discretion by the State Human Rights Appeal Board on May 30, 1984. Although both the Division and the Appeal Board entertained respondent’s complaint only on state-law grounds, neither party suggests that the elements of an age-discrimination claim differ as between the state and federal statutes.

Respondent did not seek review of the board’s in state court, but instead filed an Age Act suit in the United States District Court for the Eastern District of New York grounded on the same factual allegations considered in the state administrative proceedings. The District Court granted petitioner’s motion for summary judgment, 715 F. Supp. 42 (1989), and relied heavily on the decision in Stillians v. Iowa, 843 F. 2d 276 (CA8 1988), in holding the common-law presumption of administrative estoppel to prevail by virtue of Congress’ failure in either the language or legislative history of the Age Act “actually [to] addres[s] the issue.” 715 F. Supp., at 47. It ruled accordingly that the determination of the State’s Human Rights Division that petitioner had not engaged in age discrimination precluded federal litigation of the claim. The Court of Appeals for the Second Circuit reversed, 901 F. 2d 1148 (1990), inferring from the Act’s structure a legislative intent to deny preclusive effect to such state administrative proceedings. We granted certiorari, 498 U. S. 1023 (1991), to resolve the conflict between the ruling here under review, see also Duggan v. Board of Education of East Chicago Heights, Dist. No. 169, Cook County, Ill., 818 F. 2d 1291 (CA7 1987), and those of the Eighth Circuit in Stillians, supra, and of the Ninth Circuit in Mack v. South Bay Beer Distributors, Inc., 798 F. 2d 1279 (1986).

We have long favored application of the common-law doctrines of collateral estoppel (as to issues) and res judicata (as to claims) to those determinations of administrative bodies that have attained finality. “When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.” United States v. Utah Constr. & Mining Co., 384 U. S. 394, 422 (1966). Such repose is justified on the sound and obvious principle of judicial policy that a losing litigant deserves no rematch after a defeat fairly suffered, in adversarial proceedings, on an issue identical in substance to the one he subsequently seeks to raise. To hold otherwise would, as a general matter, impose unjustifiably upon those who have already shouldered their burdens, and drain the resources of an adjudicatory system with disputes resisting resolution. See Parklane Hosiery Co. v. Shore, 439 U. S. 322, 326 (1979). The principle holds true when a court has resolved an issue, and should do so equally when the issue has been decided by an administrative agency, be it state or federal, see University of Tennessee v. Elliott, 478 U. S. 788, 798 (1986), which acts in a judicial capacity.

Courts do not, of course, have free to impose preclusion, as a matter of policy, when the interpretation of a statute is at hand. In this context, the question is not whether administrative estoppel is wise but whether it is intended by the legislature. The presumption holds nonetheless, for Congress is understood to legislate against a background of common-law adjudicatory principles. See Briscoe v. LaHue, 460 U. S. 325 (1983); United States v. Turley, 352 U. S. 407, 411 (1957). Thus, where a common-law principle is well established, as are the rules of preclusion, see, e. g., Parklane Hosiery, supra; Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U. S. 313 (1971); Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371 (1940), the courts may take it as given that Congress has legislated with an expectation that the principle will apply except “when a statutory purpose to the contrary is evident.” Isbrandtsen Co. v. Johnson, 343 U. S. 779, 783 (1952).

This interpretative presumption is not, however, one that entails a requirement of clear statement, to the effect that Congress must state precisely any intention to overcome the presumption’s application to a given statutory scheme. Rules of plain statement and strict construction prevail only to the protection of weighty and constant values, be they constitutional, see, e. g., Atascadero State Hosp. v. Scanlon, 473 U. S. 234, 243 (1985) (requiring plain statement of intention to abrogate immunity of States under the Eleventh Amendment), or otherwise, see, e. g., EEOC v. Arabian American Oil Co., 499 U. S. 244, 248 (1991) (requiring plain statement of extraterritorial statutory effect, “to protect against unintended clashes between our laws and those of other nations which could result in international discord”). See generally Eskridge, Public Values in Statutory Interpretation, 137 U. Pa. L. Rev. 1007 (1989). “In traditionally sensitive areas, . . . the requirement of clear statement assures that the legislature has in fact faced, and intended to bring into issue, the critical matters involved in the judicial decision.” United States v. Bass, 404 U. S. 336, 349 (1971). Similar superior values, of harmonizing different statutes and constraining judicial discretion in the interpretation of the laws, prompt the kindred rule that legislative repeals by implication will not be recognized, insofar as two statutes are capable of coexistence, “absent a clearly expressed congressional intention to the contrary.” Morton v. Mancari, 417 U. S. 535, 551 (1974).

But the possibility of such an implied repeal does not cast its shadow here. We do not have before us the judgment of a state court, which would by law otherwise be accorded “the same full faith and credit in every court within the United States ... as [it has] by law or usage in the courts of such State.” 28 U. S. C. § 1738. In the face of § 1738, we have found state-court judgments in the closely parallel context of Title VII of the Civil Rights Acts of 1964, 78 Stat. 253, as amended, 42 U. S. C. §2000e et seq., see Lorillard v. Pons, 434 U. S. 575, 584 (1978), to enjoy preclusive effect in the federal courts. See Kremer v. Chemical Constr. Corp., 456 U. S. 461 (1982); see also Allen v. McCurry, 449 U. S. 90 (1980). This case, by contrast, implicates no such implied repeal, as § 1738 is inapplicable to the judicially unreviewed findings of state administrative bodies. See Elliott, supra, at 794. Nor does administrative preclusion represent independent values of such magnitude and constancy as to justify the protection of a clear-statement rule. Although administrative estoppel is favored as a matter of general policy, its suitability may vary according to the specific context of the rights at stake, the power of the agency, and the relative adequacy of agency procedures. Cf. Alexander v. Gardner-Denver Co., 415 U. S. 36, 57-58 (1974); Pearson v. Williams, 202 U. S. 281, 285 (1906). The presumption here is thus properly accorded sway only upon legislative default, applying where Congress has failed expressly or impliedly to evince any intention on the issue.

In Elliott, which also dealt with Title VII, the test for the presumption’s application was thus framed as the question “whether a common-law rule of preclusion would be consistent with Congress’ intent in enacting [the statute].” 478 U. S., at 796. See also Brown v. Felsen, 442 U. S. 127, 136 (1979); Restatement (Second) of Judgments § 83(4)(a) (1982). In contrast to 42 U. S. C. §1983, in which the Court discerned ‘“[n]othing . . . remotely expressing] any congressional intent to contravene the common-law rules of preclusion,”’ 478 U. S., at 797 (quoting Allen v. McCurry, 449 U. S. 90, 97-98 (1980)), Title VII was found by implication to comprehend just such a purpose in its direction that the EEOC accord “‘substantial weight to final findings and orders made by State or local authorities in proceedings commenced under State or local [employment discrimination] law.’” Elliott, supra, at 795 (quoting 42 U. S. C. § 2000e-5(b)). What does not preclude a federal agency cannot preclude a federal court, see Kremer, supra, at 470, and n. 7; Duggan, 818 F. 2d, at 1294; we accordingly held that in the district courts the “substantial weight” standard allowed clearly for something less than preclusion. Elliott, supra, at 795.

We reach the same result here, for the Age Act, too, carries an implication that the federal courts should recognize no preclusion by state administrative findings with respect to age-discrimination claims. While the statute contains no express delimitation of the respect owed to state agency findings, its filing requirements make clear that collateral estop-pel is not to apply. Section 14(b) requires that where a State has its own age-discrimination law, a federal Age Act complainant must first pursue his claim with the responsible state authorities before filing in federal court. 29 U. S. C. § 633(b); Oscar Mayer & Co. v. Evans, 441 U. S. 750 (1979). It further provides that “no suit may be brought under [the Age Act] before the expiration of sixty days after proceedings have been commenced under the State law, unless such proceedings have been earlier terminated.” The deadline for filing with the EEOC likewise refers to the termination of prior state administrative action, § 7(d)(2) providing that where § 14(b) applies “[s]uch a charge shall be filed . . . within 300 days after the alleged unlawful practice occurred, or within 30 days after receipt by the individual of notice of termination of proceedings under State law, whichever is earlier.” 29 U. S. C. § 626(d)(2). Both provisions plainly assume the possibility of federal consideration after state agencies have finished theirs.

And yet such federal proceedings would be strictly pro forma if state administrative findings were given preclusive effect. It goes without saying that complainants who succeed in state proceedings will not pursue suit in federal court (except perhaps when the state remedy, or its enforcement, is thought to be inadequate); § 14(b)’s requirement that claimants file with state authorities before doing so in federal court was in fact “intended to screen from the federal courts those discrimination complaints that might be settled to the satisfaction of the grievant in state proceedings.” Oscar Mayer, supra, at 756. A complainant who looks to a federal court after termination of state proceedings will therefore ordinarily do so only when the state agency has held against him. In such a case, however, the employer would likely enjoy an airtight defense of collateral estoppel if a state agency determination on the merits were given preclusive effect. Cf. Kremer, supra, at 479-480. Insofar as applying preclusion would thus reduce to insignificance those cases in which federal consideration might be pursued in the wake of the completed proceedings of state agencies, § 14(b)’s provision for just such consideration would be left essentially without effect. But of course we construe statutes, where possible, so as to avoid rendering superfluous any parts thereof. See, e. g., United States v. Menasche, 348 U. S. 528, 538-539 (1955).

That the Age Act lacks the Title VII’s § 2000e-5(b) stressed in Elliott is immaterial. There was nothing talismanic about that language; it was “simply the most obvious piece of evidence that administrative res judicata does not operate in a Title VII suit.” Duggan, supra, at 1297. It would indeed be ironic if that section were to make the difference between that statute and the Age Act insofar as preclusion in federal courts is concerned, for the language was added to Title VII not because the EEOC was applying administrative preclusion, or “giving state administrative decisions too much weight, but because it was affording them too little.” Kremer, supra, at 471, n. 8. Similar provision has been unnecessary in the Age Act, for as to age-discrimination claims the EEOC of its own accord came to extend some level of deference to the determinations of state authorities. See Brief for United States et al. as Amici Curiae 24. It is, in any event, fair to say that even without Title VIPs “substantial weight” requirement the Court would have found no administrative preclusion in that context. Title VII’s § 706(c), 42 U. S. C. §2000e-5(c), which also provides for federal court action in the aftermath of terminated state proceedings and is nearly identical to the Age Act’s § 14(b), see Oscar Mayer, supra, at 755, would have provided yet further support for the Court’s result there.

Thus § 14(b) suffices to outweigh the lenient presumption in favor of administrative estoppel, a holding that also comports with the broader scheme of the Age Act and the provisions for its enforcement. Administrative findings with respect to the age-discrimination claims of federal employees enjoy no preclusive effect in subsequent judicial litigation, see Rosenfeld v. Department of Army, 769 F. 2d 237 (CA4 1985); Nabors v. United States, 568 F. 2d 657 (CA9 1978); cf. Chandler v. Roudebush, 425 U. S. 840 (1976) (same, with respect to Title VII claims), and since there is no reason to believe federal enforcement agencies are any less competent than their state counterparts, it would be anomalous to afford more deference to one than the other. It would, indeed, invite further capricious anomalies as well, for whether age-discrimination claims are investigated first by the EEOC or by state authorities is a matter over which the complainant has no control, see 29 CFR §§1626.9, 1626.10 (1990); whether or not he might receive his day in court (complete with jury, see 29 U. S. C. § 626(c)(2)), would then depend, under petitioner’s theory, on bureaucratic chance. Petitioner’s reading would also lead to disparities from State to State, depending on whether a given jurisdiction had an age-discrimination statute of its own. See § 633(b). Moreover, on the assumption that claimants fare better in federal court than before state agencies, and in light of § 14(a)’s provision that state proceedings are superseded upon commencement of federal action, see § 633(a), a recognition of administrative estoppel here would induce all claimants to initiate federal suit at the earliest opportunity after filing the state complaint, thereby defeating the purpose of deferral to resolve complaints outside the federal system. See Oscar Mayer, supra, at 755-756.

Finally, although the wisdom of Congress’ decision against according preclusive effect to state agency rulings has no bearing upon the disposition of the case, that choice has plausible policy support. Although it is true that there will be some duplication of effort, the duplication need not be great. We speak, after all, only of agency determinations not otherwise subjected to judicial review; our reading of the statute will provide no more than a second chance to prove the claim, and even then state administrative findings may be entered into evidence at trial. See Chandler, supra, at 863, n. 39. It also may well be that Congress thought state agency consideration generally inadequate to ensure full protection against age discrimination in employment. In this very case, the New York Division of Human Rights, which ruled against respondent on the merits, has itself appeared as ami-cus on his behalf, highlighting the shortfalls of its procedures and resources. See Brief for New York State Division of Human Rights as Amicus Curiae 18-22. Alternatively, by denying preclusive effect to any such agency determination, Congress has eliminated litigation that would otherwise result, from State to State and case to case, over whether the agency has in fact “act[ed] in a judicial capacity” and afforded the parties “an adequate opportunity to litigate,” Utah Constr. Co., 384 U. S., at 422, so as to justify application of a normal rule in favor of estoppel.

For these reasons, the District Court’s grant of motion for summary judgment was erroneous on the grounds stated. The judgment of the Court of Appeals is affirmed, and the case is remanded to the District Court for proceedings consistent with this opinion.

It is so


text:
    GOLLUST et al. v. MENDELL et al.
    No. 90-659.
    Argued April 15, 1991
    Decided June 10, 1991

      Edwin B. Mishkin argued the cause for petitioners. With him on the briefs were Victor I. Lewkow and Thomas G. Dagger.

      Irving Malchman argued the cause for respondents and filed a brief for respondent Mendell.

      James R. Doty argued the cause for the Securities and Exchange Commission as amicus curiae urging affirmance. With him on the brief were Acting Solicitor General Roberts, Michael R. Dreeben, Paul Gonson, Jacob H. Stillman, and Thomas L. Riesenberg.

   Justice Souter

delivered the opinion of the Court.

Section 16(b) of the Securities Exchange Act of 1934, 48 Stat. 896, 15 U. S. C. § 78p(b), imposes a general rule of strict liability on owners of more than 10% of a corporation’s listed stock for any profits realized from the purchase and sale, or sale and purchase, of such stock occurring within a 6-month period. These statutorily defined “insiders,” as well as the corporation’s officers and directors, are liable to the issuer of the stock for their short-swing profits, and are subject to suit “instituted ... by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer . . . .” Ibid.

Our prior cases interpreting § 16(b) have resolved questions about the liability of an insider defendant under the statute. This case, in contrast, requires us to address a plaintiff’s standing under § 16(b) and, in particular, the requirements for continued standing after the institution of an action. We hold that a plaintiff, who properly “instituted [a § 16(b) action as] the owner of [a] security of the issuer,” may continue to prosecute the action after his interest in the issuer is exchanged in a merger for stock in the issuer’s new corporate parent.

I

In January 1987, respondent Ira L. Mendell filed a complaint under § 16(b) against petitioners in the United States District Court for the Southern District of New York, stating that he owned common stock in Viacom International, Inc. (International), and was suing on behalf of the corporation. He alleged that petitioners, a collection of limited partnerships, general partnerships, individual partners and corporations, “operated as a single unit” and were, for purposes of this litigation, a “single . . . beneficial owner of more than ten per centum of the common stock” of International. App. to Pet. for Cert. 40a-42a. Respondent claimed that petitioners were liable to International under § 16(b) for approximately $11 million in profits earned by them from trading in International’s common stock between July and October 1986. Id., at 42a-43a. The complaint recited that respondent had made a demand upon International and its board of directors to bring a § 16(b) action against petitioners and that more than 60 days had passed without the institution of an action.

In June 1987, less than six months after respondent had filed his § 16(b) complaint, International was acquired by Arsenal Acquiring Corp., a shell corporation formed by Arsenal Holdings, Inc. (now named Viacom, Inc.) (Viacom), for the purpose of acquiring International. By the terms of the acquisition, Viacom’s shell subsidiary was merged with International, which then became Viacom’s wholly owned subsidiary and only asset. The stockholders of International received a combination of cash and stock in Viacom in exchange for their International stock. Id., at 40a; App. 14-26.

As a result of the acquisition, respondent, who was a stockholder in International when he instituted this action, acquired stock in International’s new parent corporation and sole stockholder, Viacom. Respondent amended his complaint to reflect the restructuring by claiming to prosecute the § 16(b) action on behalf of Viacom as well as International. App. to Pet. for Cert. 44a.

Following the merger, petitioners moved for summary judgment, arguing that respondent had lost standing to maintain the action when the exchange of stock and cash occurred, after which respondent no longer owned any security of International, the “issuer.” The District Court held that § 16(b) actions “may be prosecuted only by the issuer itself or the holders of its securities,” and granted the motion because respondent no longer owned any International stock. App. to Pet. for Cert. 32a. The court concluded that only Viacom, as International’s sole security holder, could continue to prosecute this action against petitioners. Id., at 33a.

A divided Court of Appeals reversed. Mendell ex rel. Viacom, Inc. v. Gollust, 909 F. 2d 724 (CA2 1990). The majority saw nothing in the text of § 16(b) to require dismissal of respondent’s complaint. “[T]he language of the statute speaks of the ‘owner’ of securities; but such language is not modified by the word ‘current’ or any like limiting expression. The statute does not specifically bar the maintenance of § 16(b) suits by former shareholders and Congress . . . could readily have eliminated such individuals.” Id., at 730. Since the provisions of the statute were open to “interpretation,” the court relied on the statute’s remedial purposes in determining “whether the policy behind the statute is best served by allowing the claim.” Id., at 728-729. The majority concluded that the remedial policy favored recognizing respondent’s continued standing after the merger. “Permitting [respondent] to maintain this § 16(b) suit is not barred by the language of the statute or by existing case law, and it is fully consistent with the statutory objectives.” Id., at 731. The summary judgment for petitioners was reversed.

The dissent took issue with this conflict with prior decisions of the Second Circuit and at least one other. See Portnoy v. Kawecki Berylco Industries, Inc., 607 F. 2d 766, 767 (CA7 1979); Rothenberg v. United Brands Co., CCH Fed. Sec. L. Rep. ¶ 96,045 (SDNY), aff’d mem., 673 F. 2d 1295 (CA2 1977).

We granted certiorari, 498 U. this conflict and to determine whether a stockholder who has properly instituted a § 16(b) action to recover profits from a corporation’s insiders may continue to prosecute that action after a merger involving the issuer results in exchanging the stockholder’s interest in the issuer for stock in the issuer’s new corporate parent.

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Congress passed § 16(b) of the 1934 Act to “preven[t] the unfair use of information which may have been obtained by [a] beneficial owner, director, or officer by reason of his relationship to the issuer.” 15 U. S. C. §78p(b). As we noted in Foremost-McKesson, Inc. v. Provident Securities Co., 423 U. S. 232, 243 (1976): “Congress recognized that insiders may have access to information about their corporations not available to the rest of the investing public. By trading on this information, these persons could reap profits at the expense of less well informed investors.” Prohibiting short-swing trading by insiders with nonpublic information was an important part of Congress’ plan in the 1934 Act to “insure the maintenance of fair and honest markets,” 15 U. S. C. § 78b; and to eliminate such trading, Congress enacted a “flat rule [in § 16(b)] taking the profits out of a class of transactions in which the possibility of abuse was believed to be intolerably great.” Reliance Electric Co. v. Emerson Electric Co., 404 U. S. 418, 422 (1972); see also Kern County Land Co. v. Occidental Petroleum Corp., 411 U. S. 582, 591-595 (1973).

The question presented in this case requires us to determine who may maintain an action to enforce this “flat rule.” We begin with the text. Section 16(b) imposes liability on any “beneficial owner, director, or officer” of a corporation for “any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of [an] issuer . . . within any period of less than six months.” 15 U. S. C. § 78p(b). A “[s]uit to recover [an insider’s] profit may be instituted ... by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer . . . .” Ibid.

The statute imposes a form of strict liability on “beneficial owner[s],” as well as on the issuer’s officers and directors, rendering them liable to suits requiring them to disgorge their profits even if they did not trade on inside information or intend to profit on the basis of such information. See Kern County Land Co. v. Occidental Petroleum Corp., supra, at 595. Because the statute imposes “liability without fault within its narrowly drawn limits,” Foremost-McKesson, Inc. v. Provident Securities Co., supra, at 251, we have been reluctant to exceed a literal, “mechanical” application of the statutory text in determining who may be subject to liability, even though in some cases a broader view of statutory liability could work to eliminate an “evil that Congress sought to correct through § 16(b).” Reliance Electric Co. v. Emerson Electric Co., supra, at 425.

To enforce this strict liability rule on insider trading, Congress chose to rely solely on the issuers of stock and their security holders. Unlike most of the federal securities laws, § 16(b) does not confer enforcement authority on the Securities and Exchange Commission. It is, rather, the security holders of an issuer who have the ultimate authority to sue for enforcement of § 16(b). If the issuer declines to bring a § 16(b) action within 60 days of a demand by a security holder, or fails to prosecute the action “diligently,” 15 U. S. C. § 78p(b), then the security holder may “institut[e]” an action to recover insider short-swing profits for the issuer. Ibid.

In contrast to the “narrowly drawn limits” on the class of corporate insiders who may be defendants under § 16(b), Foremost-McKesson, Inc. v. Provident Securities Co., supra, at 251, the statutory definitions identifying the class of plaintiffs (other than the issuer) who may bring suit indicate that Congress intended to grant enforcement standing of considerable breadth. The only textual restrictions on the standing of a party to bring suit under § 16(b) are that the plaintiff must be the “owner of [a] security” of the “issuer” at the time the suit is “instituted.”

Although plaintiffs seeking to sue under the statute must own a “security,” § 16(b) places no significant restriction on the type of security adequate to confer standing. “[A]ny security” will suffice, 15 U. S. C. §78p(b), the statutory definition being broad enough to include stock, notes, warrants, bonds, debentures, puts, calls, and a variety of other financial instruments; it expressly excludes only “currency or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months . . . .” § 78c(a)(10); see also Reves v. Ernst & Young, 494 U. S. 56 (1990). Nor is there any restriction in terms of either the number or percentage of shares, or the value of any other security, that must be held. See Portnoy v. Revlon, Inc., 650 F. 2d 895, 897 (CA7 1981) (plaintiff bought single share); Magida v. Continental Can Co., 231 F. 2d 843, 847-848 (CA2) (plaintiff owned 10 shares), cert. denied, 351 U. S. 972 (1956). In fact, the terms of the statute do not even require that the security owner have had an interest in the issuer at the time of the defendant’s short-swing trading, and the courts to have addressed this issue have held that a subsequent purchaser of the issuer’s securities has standing to sue for prior short-swing trading. See, e. g., Dottenheim v. Murchison, 227 F. 2d 737, 738-740 (CA5 1955), cert. denied, 351 U. S. 919 (1956); Blau v. Mission Corp., 212 F. 2d 77, 79 (CA2), cert. denied, 347 U. S. 1016 (1954).

The second requirement for § 16(b) standing is that the plaintiff own a security of the “issuer” whose stock was traded by the insider defendant. An “issuer” of a security is defined under § 3(a)(8) of the 1934 Act as the corporation that actually issued the security, 15 U. S. C. §78c(a)(8), and does not include parent or subsidiary corporations. While this requirement is strict on its face, it is ostensibly subject to mitigation in the final requirement for § 16(b) standing, which is merely that the plaintiff own a security of the issuer at the time the § 16(b) action is “instituted.” Today, as in 1934, the word “institute” is commonly understood to mean “inaugurate or commence; as to institute an action.” Black’s Law Dictionary 985-986 (3d ed. 1933) (citing cases); see Black’s Law Dictionary 800 (6th ed. 1990) (same definition); Random House Unabridged Dictionary of the English Language 988 (2d ed. 1987) (“to set in operation; to institute a lawsuit”). Congressional intent to adopt this common understanding is confirmed by Congress’ use of the same word elsewhere to mean the commencement of an action. See, e. g., 8 U. S. C. § 1503(a) (“action . . . may be instituted only within five years after . . . final administrative denial”); 42 U. S. C. § 405(g) (“Any action instituted in accordance with this subsection shall survive notwithstanding any change in the person occupying the office of Secretary or any vacancy in such office”).

The terms of § 16(b), read in context, of signal breadth, expressly limited only by conditions existing at the time an action is begun. Petitioners contend, however, that the statute should at least be read narrowly enough to require the plaintiff owning a “security” of the “issuer” at the time the action is “instituted” to maintain ownership of the issuer’s security throughout the period of his participation in the litigation. See Brief for Petitioners 11. But no such “continuous ownership requirement,” ibid., is found in the text of the statute, nor does § 16(b)’s legislative history reveal any congressional intent to impose one.

This is not to say, of course, a maintained by someone who is subsequently divested of any interest in the outcome of the litigation. Congress clearly intended to put “a private-profit motive behind the uncovering of this kind of leakage of information, [by making] the stockholders [its] policemen.” Hearings on H. R. 7852 and H. R. 8720 before the House Committee on Interstate and Foreign Commerce, 73d Cong., 2d Sess., 136 (1934) (testimony of Thomas G. Corcoran) (hereinafter Hearings). The sparse legislative history on this question, which consists primarily of hearing testimony by one of the 1934 Act's drafters, merely confirms this conclusion.

Congress must, indeed, have assumed any plaintiff would maintain some continuing financial stake in the litigation for a further reason as well. For if a security holder were allowed to maintain a § 16(b) action after he had lost any financial interest in its outcome, there would be serious constitutional doubt whether that plaintiff could demonstrate the standing required by Article III’s case-or-controversy limitation on federal court jurisdiction. See Phillips Petroleum Co. v. Shutts, 472 U. S. 797, 804 (1985) (Article III requires “the party requesting standing [to allege] ‘such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues’ ”) (quoting Baker v. Carr, 369 U. S. 186, 204 (1962)); see also Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 472 (1982). Although “Congress may grant an express right of action to persons who otherwise would be barred by prudential standing rules,” Warth v. Seldin, 422 U. S. 490, 501 (1975), “Art. III’s requirement remains: the plaintiff still must allege a distinct and palpable injury to himself.” Ibid. Moreover, the plaintiff must maintain a “personal stake” in the outcome of the litigation throughout its course. See United States Parole Comm’n v. Geraghty, 445 U. S. 388, 395-397 (1980).

Hence, we have no difficulty ment of § 16(b), Congress understood and intended that, throughout the period of his participation, a plaintiff authorized to sue insiders on behalf of an issuer would have some continuing financial interest in the outcome of the litigation, both for the sake of furthering the statute’s remedial purposes by ensuring that enforcing parties maintain the incentive to litigate vigorously and to avoid the serious constitutional question that would arise from a plaintiff’s loss of all financial interest in the outcome of the litigation he had begun. See Crowell v. Benson, 285 U. S. 22, 62 (1932) (“When the validity of an act of Congress is drawn in question, and even if a serious doubt of constitutionality is raised, . . . this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided”); see also Public Citizen v. Department of Justice, 491 U. S. 440, 465-466 (1989); id., at 481 (Kennedy, J., concurring in judgment).

B

The conclusion that § 16(b) requires a plaintiff security holder to maintain some financial interest in the outcome of the litigation does not, however, tell us whether an adequate financial stake can be maintained when the plaintiff’s interest in the issuer has been replaced by one in the issuer’s new parent. We think it can be.

The modest financial stake in an issuer sufficient to bring suit is not necessarily greater than an interest in the original issuer represented by equity ownership in the issuer’s parent corporation. A security holder eligible to institute suit will have no direct financial interest in the outcome of the litigation, since any recovery will inure only to the issuer’s benefit. Yet the indirect interest derived through one share of stock is enough to confer standing, however slight the potential marginal increase in the value of the share. A bondholder’s sufficient financial interest may be even more attenuated, since any recovery by the issuer will increase the value of the bond only because the issuer may become a slightly better credit risk.

Thus, it is difficult to see how such a bondholder plaintiff, for example, is likely to have a more significant stake in the outcome of a § 16(b) action than a stockholder in a company whose only asset is the issuer. Because such a bondholder’s attenuated financial stake is nonetheless sufficient to satisfy the statute’s initial standing requirements, the stake of a parent company stockholder like respondent should be enough to meet the requirements for continued standing, so long as that is consistent with the text of the statute. It is consistent, of course, and in light of the congressional policy of lenient standing, we will not read any further condition into the statute, beyond the requirement that a § 16(b) plaintiff maintain a financial interest in the outcome of the litigation sufficient to motivate its prosecution and avoid constitutional standing difficulties.

Ill

In this case, respondent has satisfied the statute’s requirements. He owned a “security” of the “issuer” at the time he “instituted” this § 16(b) action. In the aftermath of International’s restructuring, he retains a continuing financial interest in the outcome of the litigation derived from his stock in International’s sole stockholder, Viacom, whose only asset is International. Through these relationships, respondent still stands to profit, albeit indirectly, if this action is successful, just as he would have done if his original shares had not been exchanged for stock in Viacom. Although a calculation of the values of the respective interests in International that respondent held as its stockholder and holds now as a Viacom stockholder is not before us, his financial interest is actually no less real than before the merger and apparently no more attenuated than the interest of a bondholder might be in a § 16(b) suit on an issuer’s behalf.

The judgment of the Court of Appeals is, affirmed.

It is so ordered.

       The text of § 16(b) reads in full:
      “For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of his relationship to the issuer, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such issuer (other than an exempted security) within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the issuer irrespective of any intention on the part of such beneficial owner, director, or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer if the issuer shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. This subsection shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Commission by rules and regulations may exempt as not comprehended within the purpose of this subsection.” 15 U. S. C. §78p(b).
      The phrase “beneficial owner, director, or officer” is defined in § 16(a) as “[ejvery person who is directly or indirectly the beneficial owner of more than 10 per centum of any class of any equity security . . . which is registered pursuant to [§ 12 of the 1934 Act], or who is a director or an officer of the issuer of such security . . . .” 15 U. S. C. §78p(a).

       See Foremost-McKesson, Inc. v. Provident Securities Co., 423 U. S. 232 (1976) (defendant must be 10% beneficial owner before purchase to be subject to liability for subsequent sale); Kern County Land Co. v. Occidental Petroleum Corp., 411 U. S. 582 (1973) (binding option to sell stock not a "sale” for purposes of § 16(b)); Reliance Electric Co. v. Emerson Electric Co., 404 U. S. 418 (1972) (no liability for sales by defendant after its ownership interest fell below 10%); Blau v. Lehman, 368 U. S. 403 (1962) (partnership not liable under § 16(b) for trades by partner).

       International stockholders who chose not to exchange their shares under the terms of the merger were afforded appraisal rights under Ohio law. App. 25-26. Respondent did not exercise his right to appraisal.

       Respondent also sought to sue derivatively on behalf of International. App. to Pet. for Cert. 44a. This “double derivative” claim was dismissed by the District Court. Id., at 33a. Because of its disposition of respondent’s § 16(b) claim, the Court of Appeals did not reach this issue. Mendell ex rel. Viacom, Inc. v. Gollust, 909 F. 2d 724, 731 (CA2 1990). Although respondent now “urges upon th[is] Court the validity of his double derivative action,” Brief for Respondent 26, this issue was not properly presented to this Court for review and we do not reach it.

       The Court of Appeals observed:
      “Here plaintiff’s suit was timely, and while his § 16(b) suit was pending he was involuntarily divested of his share ownership in the issuer through a merger. But for that merger plaintiff’s suit could not have been challenged on standing grounds. Although we decline — in keeping with § 16(b)’s objective analysis regarding defendants’ intent — to inquire whether the merger was orchestrated for the express purpose of divesting plaintiff of standing, we cannot help but note that the incorporation of Viacom and the merger proposal occurred after plaintiff’s § 16(b) claim was instituted. Hence, the danger of such intentional restructuring to defeat the enforcement mechanism incorporated in the statute is clearly present.” 909 F. 2d, at 731.

       Cf. § 2(11) of the Securities Act of 1933, 15 U. S. C. §77b(11) (definition of “issuer” for certain purposes is “any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer").

       Petitioners have directed our attention only to a statement by Thomas G. Corcoran, a principal drafter of the statute, at one of the hearings on the 1934 Act. Corcoran testified that Congress could be confident that § 16(b) would be enforced because the enactment of the statute would “[say] to all of the stockholders of the company, ‘You can recover any of this profit for your own account, if you find out that any such transactions are going on.’ ” Hearings 136. This statement was not, of course, a complete description of the class of plaintiffs entitled to § 16(b) standing, since “any security [holder]” may sue, not just stockholders. 15 U. S. C. § 78p(b). Nor was it meant as a precise description of a plaintiff’s incentive to sue; the witness elsewhere made it clear that a stockholder plaintiff (or any other security holder) would not directly receive any recovery, but would be suing solely on the corporation’s behalf:
      “The fact that the stockholders, with an interest, are permitted to sue to recover that ■profit for the benefit of the company, puts anyone doing this particular thing, in the position of taking [a] risk that somebody with a profit motive will try to find out.” Hearings 137 (emphasis added).
      Corcoran’s analysis does, however, demonstrate the statute’s reliance for its enforcement on the profit motive in an issuer’s security holders, a dependence that could hardly cease the moment after suit was filed.