Securities and Exchange Commission Historical Society

Chasing the Devil Around the Stump: Securities Regulation, the SEC and the Courts

The Minds of the Justices

The Mystery of Justice Douglas

- April 17, 1939 William O. Douglas with his son

Given Justice William O. Douglas’s strong stint as SEC Chairman and his academic background in corporate and securities law, a casual observer would expect his tenure on the Supreme Court to be distinguished with the authorship of major SEC decisions. Yet, even after his early recusal policy which kept him from sitting on cases in which he had government-sector involvement, Douglas did not exert the influence on the Supreme Court in securities cases that one would expect. An examination of the justices’ public archives before 1972 shows that it was lesser-known justices, such as Stanley Reed, Wiley Rutledge, Frank Murphy and Arthur Goldberg, who led the Court decision writing in favor of an expansive interpretation of the Securities Acts.44

What explains this anomaly? Inside the Supreme Court, deliberations are secret and the only evidence we have is the personal papers and notes of the justices. Those archives help answer the mystery of why Justice Douglas appears only occasionally as the author of the majority opinion. Supreme Court internal rules provide that the longest serving justice on the winning side of the case has the right to assign the opinion writing. After 1938, when the Court switched dramatically to permit broadened administrative powers within the SEC to regulate interstate commerce in securities, the controversy about the authority of the SEC to make administrative rules became settled law. When Justice Douglas, and others such as Justices Hugo Black and Robert Jackson, who had fought the battle during the New Deal for passage and the constitutionality of the Securities Acts were on the winning sides of many cases, they simply chose to assign the opinions to fellow justices.

In addition, other justices on the Court took special interest in securities and administrative law cases. Justice Reed, who had taught corporate and securities law as a professor, remained a student of securities law while on the court. His papers reflect a deep passion for understanding and implementing complicated legislation regulating the securities industry. Justice Rutledge was a strong academic lawyer, serving as dean of the University of Iowa College of Law. His private archives show an acute academic mind with wide interests in corporation, administrative law and securities fields. Justices Murphy and Goldberg, somewhat by default, also became interested in the intricate and complicated arguments about the manner in which the SEC interpreted and implemented Congressional legislation. Justice Tom Clark, after he was appointed to the Supreme Court in 1949, often joined them.45

These justices took on securities cases and fashioned a strong legal regimen that balanced their role as reviewers of the law, while permitting reasonable administrative rule making. As Justice Goldberg wrote, “It is necessary to bear the limitations of the judicial process in mind. Judicial law can help us ensure compliance by government and by our citizenry with the Bill of Rights and valid laws and regulations -- matters of transcendent importance. Judges can invalidate unconstitutional law and unauthorized executive actions… But judges cannot, however, establish social and economic justice by judicial fiat.”46 These lesser-known justices adopted a conscientious fidelity to judicial review and statutory interpretation that promoted the power of the Congress and the SEC to regulate the national securities and financial markets.

This is not to say that Douglas, Frankfurter, Black and Jackson were not interested or influential. Where necessary, they exerted their influence behind the scenes, drafting memos, gentle reminders, firm rejoinders, and complimentary missives to their colleagues in their own attempts to win arguments among “the brethren,” as the justices referred to each other. They did most of their work winning securities cases out of public sight, with consensus building and persuasion, as they focused their decision-writing skills on other cases and issues, such as emerging civil and criminal rights matters, about which they felt more passionate.


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Footnotes:

(44) William M. Wiecek, The Birth of the Modern Constitution: The United States Supreme Court, 1941-1953, (Cambridge University Press: Cambridge, 2006), Chapter 2.

(45) Nathaniel L. Nathanson, “Statutory Interpretation and Mr. Justice Rutledge,” 10 Vand. Law Review 35 (1949-50): 584-624; Albert S. Abel, “The Commerce Power: An Instrument of Federalism,” 10 Vand. Law Review 35 (1949; 50): 625-662; Mary Frances Berry, Stability, Security and Continuity: Mr. Justice Burton and Decision-Making in the Supreme Court, 1945-1958 (Greenwood Press: Westport, CT, 1978), 30-34.


Related Museum Resources

Papers

March 21, 1939
transcript pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
December 7, 1939
transcript pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
May 1940
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
May 16, 1940
transcript pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
May 16, 1940
transcript pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
May 24, 1940
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
May 25, 1942
image pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
November 16, 1942
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
November 17, 1942
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
November 18, 1942
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
December 17, 1942
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
December 21, 1942
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
January 23, 1943
transcript pdf (Frederick Moore Vinson Collection, University of Kentucky)
January 27, 1943
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
January 29, 1943
transcript pdf (Stanley Forman Reed Collection, University of Kentucky)
January 30, 1943
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
February 1943
image pdf (William O. Douglas Papers, courtesy Library of Congress)
February 2, 1943
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
November 3, 1943
image pdf (Robert H. Jackson Papers, courtesy Library of Congress)
November 4, 1943
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
November 4, 1943
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
March 27, 1944
image pdf (Wiley Rutledge Papers, courtesy Library of Congress)
June 29, 1944
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
December 21, 1944
transcript pdf (Stanley Forman Reed Collection, University of Kentucky)
January 11, 1945
image pdf (Stanley Forman Reed Collections, courtesy University of Kentucky)
December 18, 1945
transcript pdf (Harlan Fiske Stone Papers, courtesy Library of Congress)
March 7, 1946
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
November 1946
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
November 15, 1946
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
November 23, 1946
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
January 28, 1947
transcript pdf (Wiley B. Rutledge Papers, courtesy Library of Congress)
March 1, 1947
image pdf (William O. Douglas Papers, courtesy Library of Congress)
March 31, 1947
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
June 18, 1947
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
June 18, 1947
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
June 18, 1947
transcript pdf (Frederick Moore Vinson Collection, University of Kentucky)
June 23, 1947
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
October 8, 1947
image pdf (Robert H. Jackson Papers, courtesy Library of Congress)
October 20, 1947
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
May 20, 1948
image pdf (Frederick Moore Vinson Collections, courtesy University of Kentucky)
October 24, 1948
image pdf (Wiley B. Rutledge Papers, courtesy of Library of Congress)
December 3, 1948
transcript pdf (Frederick Moore Vinson Collection, University of Kentucky)
January 17, 1949
image pdf (Wiley B. Rutledge Papers, courtesy of Library of Congress)
May 13, 1949
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
June 2, 1949
transcript pdf (Wiley Rutledge Papers, courtesy Library of Congress)
June 22, 1949
transcript pdf (Frederick Moore Vinson Collection, University of Kentucky)
February 7, 1950
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
February 16, 1950
transcript pdf (Stanley Forman Reed Collection, University of Kentucky)
Summer 1950
image pdf (Frederick Moore Vinson Collection, University of Kentucky)
January 12, 1951
image pdf (Harold H. Burton Papers, courtesy Library of Congress)
January 12, 1951
image pdf (Harold H. Burton Papers, courtesy Library of Congress)
1953
transcript pdf (Robert H. Jackson Papers, courtesy Library of Congress)
June 1, 1953
image pdf (Frederick Moore Vinson Collections, courtesy University of Kentucky)
June 3, 1953
transcript pdf (Frederick Moore Vinson Collection, University of Kentucky)
December 5, 1953
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
December 21, 1953
image pdf (William O. Douglas Papers, courtesy Library of Congress)
December 22, 1953
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
December 30, 1953
image pdf (William O. Douglas Papers, courtesy Library of Congress)
May 29, 1954
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
February 12, 1955
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
April 8, 1955
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
April 26, 1957
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
April 29, 1957
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
June 10, 1957
image pdf (Stanley Forman Reed Collections, courtesy University of Kentucky)
May 9, 1958
image pdf (Stanley Forman Reed Collections, courtesy University of Kentucky)
February 14, 1959
image pdf (William O. Douglas Papers, courtesy Library of Congress)
February 16, 1959
image pdf (William O. Douglas Papers, courtesy Library of Congress)
March 5, 1959
image pdf (William O. Douglas Papers, courtesy Library of Congress)
March 14, 1959
image pdf (William J. Brennan, Jr. Papers, courtesy Library of Congress)
March 14, 1959
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
March 16, 1959
image pdf (William O. Douglas Papers, courtesy Library of Congress)
March 18, 1959
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
March 21, 1959
image pdf (Earl Warren Papers, courtesy Library of Congress)
April 24, 1959
image pdf (Stanley Forman Reed Collections, courtesy University of Kentucky)
October 8, 1959
image pdf (Stanley Forman Reed Collections, courtesy University of Kentucky)
April 1965
transcript pdf (William O. Douglas Papers, courtesy Library of Congress)
December 6, 1965
image pdf (William O. Douglas Papers, courtesy Library of Congress)
April 1966
image pdf (William O. Douglas Papers, courtesy Library of Congress)
April 19, 1966
image pdf (William O. Douglas Papers, courtesy Library of Congress)
February 23, 1968
transcript pdf (William J. Brennan, Jr. Papers, courtesy Library of Congress)
December 16, 1968
image pdf (Thurgood Marshall Papers, courtesy Library of Congress)
January 8, 1969
transcript pdf (William J. Brennan, Jr. Papers, courtesy Library of Congress)
February 17, 1971
image pdf (William J. Brennan, Jr. Papers, courtesy Library of Congress)
January 8, 1986
image pdf (Harry A. Blackmun Papers, courtesy Library of Congress)

Photos

August 5, 1937
(Courtesy Library of Congress )
January 18, 1938
March 20, 1939

(standing, left to right) Robert E. Healy, Jerome Frank, Edward C. Eicher and George C. Mathews

(Courtesy Library of Congress )
March 27, 1939
February 1940
(Courtesy Library of Congress )

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