Amicus Curiae Brief — FS Credit Opportunities Corp., et al., Petitioners v. Saba Capital Master Fund, Ltd., et al.

No. 24-345

IN THE

Supreme Court of the United States

_________

FS CREDIT OPPORTUNITIES CORP., ET AL.,

Petitioners,

v.

SABA CAPITAL MASTER FUND, LTD., ET AL.,

Respondents.

_________

On Writ of Certiorari to the United States Court of

Appeals for the Second Circuit

_________

BRIEF OF SEPARATION OF POWERS CLINIC

AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

_________

R. TRENT MCCOTTER

Counsel of Record

SEPARATION OF POWERS CLINIC

COLUMBUS SCHOOL OF LAW

THE CATHOLIC UNIVERSITY OF

AMERICA

3600 John McCormack Rd.

Washington, DC 20064

(202) 706-5488

mccotter@cua.edu

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................... ii

INTEREST OF THE AMICUS CURIAE................... 1

SUMMARY OF THE ARGUMENT ........................... 2

ARGUMENT .............................................................. 3

I.

The Legislative Power—Including Creating

Causes of Action—Is Vested Exclusively with

Congress ............................................................... 3

II. There Are Especially Strong Textual

Indications Against Implying a Private Cause

of Action Here ...................................................... 4

III. Private Section 47(b) Causes of Action

Interfere with Article II Enforcement

Priorities .............................................................. 6

IV. Private Causes of Action to Enforce SEC Rules

14a-8 and 14a-9 Are Distinguishable ................. 7

CONCLUSION ......................................................... 11

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Alexander v. Sandoval,

532 U.S. 275 (2001) ................................................ 3

Bebchuk v. CA, Inc.,

902 A.2d 737 (Del. Ch. 2006) ................................. 9

Comcast Corp. v. Nat’l Ass’n of Afr. Am.Owned Media,

589 U.S. 327 (2020) ................................................ 3

Egbert v. Boule,

596 U.S. 482 (2022) ................................................ 3

J.I. Case Co. v. Borak,

377 U.S. 426 (1964) ................................................ 8

Santomenno ex rel. John Hancock Trust

v. John Hancock Life Ins. Co.,

677 F.3d 178 (3d Cir. 2012) ................................... 9

KBR v. Chevedden,

478 F. App’x 213 (5th Cir. 2012)............................ 9

Nestle USA, Inc. v. Doe,

593 U.S. 628 (2021) ............................................ 2, 4

Roosevelt v. E.I. Du Pont de Nemours &

Co., 958 F.2d 416 (D.C. Cir. 1992) ..................... 8, 9

Sosa v. Alvarez-Machain,

542 U.S. 692 (2004) ............................................ 2, 4

Transamerica Mortg. Advisors, Inc. v.

Lewis, 444 U.S. 11 (1979) ...................................... 5

iii

TransUnion LLC v. Ramirez,

594 U.S. 413 (2021) ................................................ 4

UFCW Loc. 1500 Pension Fund v.

Mayer,

895 F.3d 695 (9th Cir. 2018) .............................. 7, 9

Virginia Bankshares, Inc. v. Sandberg,

501 U.S. 1083 (1991) .............................................. 8

Constitution and Statutes

U.S. Const. art. I, § 1 ................................................... 3

U.S. Const. art. I, § 7 ................................................... 3

U.S. Const. art. I, § 8 ................................................... 3

15 U.S.C. § 80a-35 ....................................................... 5

15 U.S.C. § 80a-41 ....................................................... 6

15 U.S.C. § 80a-46 ....................................................... 5

54 Stat. 837 .................................................................. 5

84 Stat. 1428 ................................................................ 5

Other Authorities

Thomas Lee Hazen, Treatise on the Law

of Securities Regulation (2025) .............................. 9

1

INTEREST OF AMICUS CURIAE1

Amicus curiae the Separation of Powers Clinic at

The Catholic University of America’s Columbus

School of Law (previously at the Antonin Scalia Law

School at George Mason University) provides students

an opportunity to discuss, research, and write about

separation of powers issues in ongoing litigation. The

Clinic has submitted over fifty briefs in federal cases

implicating separation of powers.

The Clinic has submitted briefs at this Court in

several cases about implied private causes of action,

including Egbert v. Boule, No. 21-147, and Cisco

Systems, Inc. v. Doe I, No. 24-856.

1 No counsel for any party has authored this brief in whole or in

part, and no entity or person other than amicus curiae and its

counsel made any monetary contribution intended to fund the

preparation or submission of this brief.

2

SUMMARY OF THE ARGUMENT

“We Americans have a method for making the laws

that are over us. We elect representatives to two

Houses of Congress, each of which must enact the new

law and present it for the approval of a President,

whom we also elect.” Sosa v. Alvarez-Machain, 542

U.S. 692, 750 (2004) (Scalia, J., concurring in part and

concurring in the judgment); see Part I, infra.

Judicial creation of a cause of action therefore “is

an extraordinary act that places great stress on the

separation of powers.” Nestle USA, Inc. v. Doe, 593

U.S. 628, 636 (2021) (op. of Thomas, J., joined by

Gorsuch & Kavanaugh, JJ.). That “stress” extends

both to the Article I legislature, which has the

prerogative to create causes of action; and, in many

cases, also to the Article II executive, which typically

has the sole prerogative to enforce statutes absent a

private cause of action, see Part III, infra.

For Section 47(b) of the Investment Company Act,

there are significant textual indications that Congress

did not intend to create an implied private cause of

action, and thus judicially inventing one would yield

“great stress” to the separation of powers. Notably,

Congress provided a separate private mechanism to

ensure limited judicial recognition of the protections

in Section 47(b), while stopping short of providing an

affirmative cause of action. See Part II, infra.

To be sure, the courts have implied private causes

of action for enforcement of a handful of SEC Rules

like 14a-8 and 14a-9, but that practice dates back

many decades and involves narrow rights not

analogous to those in Section 47(b). See Part IV, infra.

3

ARGUMENT

I.

The

Legislative

Power—Including

Creating Causes of Action—Is Vested

Exclusively with Congress.

Article I vests “legislative Powers” in Congress

alone. U.S. Const. art. I, § 1. That power can be

exercised only subject to certain stringent and precise

procedural requirements such as bicameralism and

presentment, subject to veto override procedures. U.S.

Const. art. I, § 7. Congress through those procedural

requirements is assigned the responsibility for

enacting statutes creating federal jurisdiction. See

U.S. Const. art. I, § 8, cl. 9. The parameters of

legislative power extend not just to the announcement

of new substantive federal law but also to the methods

of enforcement of that federal law—e.g., whether to

create a private cause of action.

“Like substantive federal law itself, private rights

of action to enforce federal law must be created by

Congress.” Comcast Corp. v. Nat’l Ass’n of Afr. Am.Owned Media, 589 U.S. 327, 334 (2020); see Alexander

v. Sandoval, 532 U.S. 275, 286 (2001). Accordingly,

“[a]t bottom, creating a cause of action is a legislative

endeavor.” Egbert v. Boule, 596 U.S. 482, 491 (2022).

A second core structural feature of the federal

government

is

the

constitutionally

limited

assignment of federal courts to the resolution of

certain enumerated matters. Article III permits

federal courts to hear only certain limited categories

of matters—“Cases” and “Controversies”—and this

ensures that “federal courts exercise ‘their proper

function in a limited and separated government.’”

4

TransUnion LLC v. Ramirez, 594 U.S. 413, 423

(2021). “Under Article III, ... [f]ederal courts do not

possess a roving commission to publicly opine on every

legal question,” nor do they have power to “exercise

general legal oversight of the Legislative and

Executive Branches, or of private entities.” Id. at

423–24. Rather, “federal courts instead decide only

matters ‘of a Judiciary Nature.’” Id. at 424 (quoting 2

Records of the Federal Convention of 1787, at 430 (M.

Farrand ed. 1966)).

This structural reality, combined with the

constitutionally ordained role of Congress and the

President in the establishment (or not) of courts,

causes of action, and permissible relief through

statutory enactments, suggests that the entire

enterprise of squinting to discern a privately

enforceable cause of action is at odds with the

Constitution’s limited role for the judiciary. See

Nestle, 593 U.S. at 636 (op. of Thomas, J., joined by

Gorsuch & Kavanaugh, JJ.) (“[J]udicial creation of a

cause of action is an extraordinary act that places

great stress on the separation of powers.”).

II.

There Are Especially Strong Textual

Indications Against Implying a Private

Cause of Action Here.

Those relative roles of Congress and the Judiciary

mean that “[t]he question is not what case or

congressional action prevents federal courts from”

creating causes of action, but rather “what authorizes”

the courts to recognize such actions at all. Sosa, 542

U.S. at 744 (Scalia, J., concurring in part and

concurring in the judgment).

5

On that score, there are no textual indications that

Congress intended an affirmative, private cause of

action to enforce Section 47(b). In fact, quite the

opposite. Congress provided various private

mechanisms for enforcing certain ICA rights,

including those in Section 47(b) itself—but did not

provide a private right to enforce Section 47(b)

directly.

Start with other ICA provisions. As originally

enacted in 1940, a different part of the ICA “expressly

authorized private suits for damages” against certain

investment-company insiders. Transamerica Mortg.

Advisors, Inc. v. Lewis, 444 U.S. 11, 20 (1979); see 54

Stat. 837. Congress later added Section 36(b), which

states that “[a]n action may be brought … by a

securityholder of [a] registered investment company

on behalf of such company” for breach of fiduciary

duty against the company’s investment adviser or

certain affiliates. 15 U.S.C. § 80a-35(b); 84 Stat. 1428–

30.

Turning to Section 47(b) itself: Congress provided

a limited private mechanism for enforcing the

protections in that provision. Section 46(b) provides

that a contract that violates Section 47(b) generally “is

unenforceable by either party.” 15 U.S.C. § 80a46(b)(1). That allows a defendant in a breach-ofcontract case to avoid liability by arguing the contract

violates Section 47(b). But it is odd, to say the least, to

infer an affirmative cause of action—i.e., to let a

plaintiff sue to enforce a right—based on a clause that

says only that something is “unenforceable.” Congress

clearly intended Section 47(b) to be used by private

parties as a private, not a sword.

6

Given that Congress expressly provided private

causes of action elsewhere in the ICA (but not for

Section 47(b)) and given that Congress did provide a

limited means for private parties to assert certain

protections from Section 47(b) itself, there are

extensive textual indications that Congress did not

intend a standalone private cause of action to enforce

Section 47(b).

III.

Private Section 47(b) Causes of Action

Interfere with Article II Enforcement

Priorities.

Congress’s Article I power is not the only casualty

of implying a private right of action to enforce Section

47(b) of the ICA. Doing so would also interfere with

the Executive’s Article II enforcement powers.

Congress expressly gave the SEC the power to

bring enforcement actions in federal courts for ICA

violations. 15 U.S.C. § 80a-41(a). In those actions, the

SEC can seek injunctive relief and monetary

penalties. Id. § 80a-41(d), (e). The SEC also may

exempt any person, security, or transaction from “any

provision” of the ICA. Id. § 80a-6(c).

A private cause of action for those or similar

violations thus risks serious conflicts between private

and Article II priorities. To be sure, Congress can

create dual-tracked enforcement regimes and thereby

tempt such conflicts. But courts should be chary to

provoke that conflict unnecessarily.

As the Ninth Circuit aptly explained, the risk of

conflict is especially high in this context. A private

cause of action for Section 47(b) could let a party try

7

“to halt a deal the SEC has not blocked for alleged

violations of an ICA exemption the SEC has not

addressed, even though the SEC has been made fully

aware of the facts underlying those alleged

violations.” UFCW Loc. 1500 Pension Fund v. Mayer,

895 F.3d 695, 701 (9th Cir. 2018). And a private party

could ostensibly seek expansive relief, including

trying to force the defendant to rescind “every …

contract [it] has entered into for the better part of a

decade.” Id.

Further, “when it comes to ICA exemptions,” a

private cause of action “threatens to force courts and

the SEC into a tellingly odd game of chicken.” Id. “[I]f

a court concluded in the first instance that a company

had violated its ICA exemption, and if circumstances

had not changed since the court’s decision, could the

SEC re-exempt the company as it saw fit? Or would

the SEC, the body the ICA expressly charges with

considering changed circumstances in the first

instance, be bound by the court’s decision until

circumstances changed again? Either the court’s

diligent efforts get wasted, or the SEC’s express

prerogatives get thwarted. Pick your poison.” Id.

As with the textual indications, see Part II, supra,

the Article II considerations here strongly indicate no

interest by Congress in allowing private causes of

action to enforce Section 47(b).

IV.

Private Causes of Action to Enforce SEC

Rules 14a-8 and 14a-9 Are Distinguishable.

The Court has held that continued recognition of a

limited set of implied private causes of action in the

securities realm is acceptable because overturning

8

them would unsettle longstanding expectations. But

there are no such concerns when it comes to Section

47(b).

The Court’s continued recognition of an implied

cause of action to enforce SEC Rule 14a-9 is perhaps

the most famous example of a long-extant implied

private cause of action in the securities context. See

Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083,

1102–04 (1991) (declining to overrule J.I. Case Co. v.

Borak, 377 U.S. 426 (1964)).

Then-Judge Ruth Bader Ginsburg provided the

leading analysis of the limited universe of implied

securities actions in Roosevelt v. E.I. Du Pont de

Nemours & Co., 958 F.2d 416 (D.C. Cir. 1992), which

held there was likewise a cause of action to enforce the

closely related SEC Rule 14a-8 even after this Court

made clear that Courts should rarely recognize

implied actions, id. at 419–23.

Her opinion carefully analyzed

Virginia

Bankshares, which balanced a hesitancy to recognize

new implied rights of action with “a disinclination …

to disturb a longstanding ‘legal structure of private

statutory rights [that] has developed without clear

indications of congressional intent.’” Id. at 420.

Applying Virginia Bankshares, the D.C. Circuit could

“see no instruction in current Supreme Court opinions

to ‘freeze out’ private enforcement of Rule 14a–8.” Id.

at 422.

Then-Judge Ginsburg identified several reasons

why that was the case. First, as noted above, this

Court has long held there is an implied private cause

9

of action to enforce Rule 14a-9, and Rule 14a-8

provided for similar private interests. Id. at 421.

Second, like with Rule 14a-9, there was a lengthy

history of private Rule 14a-8 claims tracing back

decades, meaning that suddenly cutting off the

private right of action would upset longstanding

administrative arrangements and shareholder

expectations. Id. at 419 (collecting cases enforcing

Rule 14a-8).

Accordingly, despite this Court’s restriction of

implied causes of actions, courts have continued to

recognize implied claims to enforce Rules 14a-8 and

14a-9. See, e.g., KBR v. Chevedden, 478 F. App’x 213,

215 (5th Cir. 2012); Bebchuk v. CA, Inc., 902 A.2d 737,

742 n.28 (Del. Ch. 2006); see also Thomas Lee Hazen,

Treatise on the Law of Securities Regulation § 10:28

(2025) (“[C]ourts have agreed in recognizing the

implied right of action to enforce rights under Rule

14a-8.”).

But Section 47(b) is easily distinguishable from the

private enforcement of Rules 14a-8 and 14a-9. The

rights under those Rules are about preventing fraud

and ensuring shareholder participation in the proxy

process, but Section 47(b) is far afield from that

interest. Even more to the point, there is no

longstanding practice of bringing private Section

47(b) claims. In fact, before the Second Circuit’s

decision in 2019, the relevant cases had all rejected

such a cause of action. Santomenno ex rel. John

Hancock Trust v. John Hancock Life Ins. Co., 677 F.3d

178 (3d Cir. 2012); UFCW, 895 F.3d at 701.

10

Accordingly, the Court can easily reverse the

decision below without revisiting prior cases

recognizing a narrow set of implied securities actions

in the context of Section 14 of the Exchange Act.

11

CONCLUSION

For the foregoing reasons, amicus urges the Court

to reverse.

Respectfully submitted,

R. TRENT MCCOTTER

Counsel of Record

SEPARATION OF POWERS CLINIC

COLUMBUS SCHOOL OF LAW

THE CATHOLIC UNIVERSITY OF

AMERICA

3600 John McCormack Rd.

Washington, DC 20064

(202) 706-5488

mccotter@cua.edu

August 29, 2025