Amy Coney Barrett Says Supreme Court Liberals Rely on 'Fictional Premise' in Dissent

Key Points:

• The Supreme Court ruled 6-3 that the Investment Company Act does not grant private parties the right to sue to rescind contracts, limiting investors' ability to challenge fund governance through private litigation and emphasizing that enforcement lies with Congress and the SEC.
• The case arose from activist hedge fund Saba Capital's challenge to closed-end funds' voting power restrictions, with lower courts previously allowing private lawsuits under Section 47(b), but the Supreme Court reversed this, clarifying no implied private right of action exists in that statute.
• Justice Amy Coney Barrett, writing for the majority, criticized the dissent for relying on flawed statutory interpretations and stressed that expanding private lawsuits without clear congressional authorization oversteps judicial authority.
• Justice Elena Kagan dissented, arguing the majority’s narrow reading ignores statutory text and historical practice that support private enforcement, while Justice Ketanji Brown Jackson warned the ruling could leave violations unchecked due to the SEC’s limited resources.
• Saba Capital's founder stated the ruling does not endorse closed-end fund managers’ conduct and that the firm will pursue other legal avenues, urging the SEC to act on longstanding voting protections and shareholder harm evidence.