FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NORTHSTAR FINANCIAL ADVISORS,
INC.,
Plaintiff-Appellee, No. 09-16347
v.
D.C. No.
3:08-cv-04119-SI
SCHWAB INVESTMENTS; CHARLES
SCHWAB INVESTMENT MANAGEMENT, OPINION
INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of California
Susan Illston, District Judge, Presiding
Argued and Submitted
April 12, 2010—San Francisco, California
Filed August 12, 2010
Before: Mary M. Schroeder and N. Randy Smith, Circuit
Judges, and James Maxwell Moody, District Judge.*
Opinion by Judge Schroeder
*The Honorable James Maxwell Moody, Senior United States District
Judge for the District of Arkansas, sitting by designation.
11405
11408 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
COUNSEL
Marc J. Gross, Roseland, New Jersey, for plaintiff-appellee
Northstar Financial Advisors, Inc.
Darryl P. Rains, Palo Alto, California, for defendants-
appellants Schwab Investments, et al.
OPINION
SCHROEDER, Circuit Judge:
The issue we must decide in this appeal is whether there is
a private cause of action to enforce the provisions of § 13(a)
of the Investment Company Act of 1940 (“ICA” or “1940
Act”), 15 U.S.C. § 80a-13(a). That section generally requires
an investment company to obtain shareholder approval before
deviating from the investment policies contained in the com-
pany’s registration statement filed with the Securities and
Exchange Commission (“SEC”).
Our circuit has not decided the issue, but the Second Cir-
cuit has held that there is no private right to enforce five other
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11409
sections of the ICA, reasoning in relevant part that the pur-
pose and structure of the entire Act is grounded upon enforce-
ment by the SEC, not on private enforcement. See Bellikoff v.
Eaton Vance Corp., 481 F.3d 110, 116 (2d Cir. 2007) (per
curiam); Olmsted v. Pruco Life Ins. Co. of New Jersey, 283
F.3d 429, 433 (2d Cir. 2002). The district court, however,
held in a published opinion that Congress did intend private
enforcement of § 13(a), citing language in the Sudan
Accountability and Divestment Act of 2007 (“SADA”), Pub.
L. No. 110-174, 121 Stat. 2516 (2007), that bars suits against
investment companies and their advisors for divesting from
companies that do business in Sudan. Northstar Fin. Advisors,
Inc. v. Schwab Inv., 609 F. Supp. 2d 938, 944-45 (N.D. Cal.
2009). The district court then certified its decision for inter-
locutory appeal.
We now reverse and hold that nothing in § 13(a) as origi-
nally enacted or as subsequently amended either creates a pri-
vate cause of action or recognizes one exists with the clarity
and specificity required under Supreme Court precedent. We
are unable to agree with the district court that the SADA’s bar
to particular litigation on account of the Sudanese emergency
is sufficient to constitute recognition of a preexisting private
right of enforcement that is not otherwise evident in the lan-
guage or structure of the ICA.
We explain our conclusion by first tracing the statutory
background of the ICA, then discussing the impetus for the
legislation, and finally analyzing the issues as required under
Supreme Court law. We conclude that the Court has come to
require increasingly specific congressional direction for the
allowance of private suits to enforce public laws, and no such
direction is present in this statute.
STATUTORY BACKGROUND
I. The Original Act
Congress enacted the ICA in 1940 to provide comprehen-
sive regulation of investment companies and the mutual fund
11410 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
industry. See H.R. Rep. No. 76-2639, at 5 (1940); S. Rep. No.
76-1775, at 1 (1940). The ICA was the outgrowth of an exten-
sive study and investigation of investment trusts and invest-
ment companies conducted by the SEC in the late 1930s. See
S. Rep. No. 76-1775, at 1. Widespread fraud and mismanage-
ment in the mutual fund industry had caused shareholder
losses of more than $1 billion that decade. See H. Norman
Knickle, The Investment Company Act of 1940: SEC Enforce-
ment and Private Actions, 23 Ann. Rev. Banking & Fin. L.
777, 780-81 (2004). Accordingly, Congress sought to “ad-
dress problems including self-dealing and breaches of fidu-
ciary duties by fund managers, directors, and affiliates,
misappropriation of fund assets, and misrepresentations to
investors” that had plagued the mutual fund industry. Id. at
781 (footnotes omitted); see also 15 U.S.C. § 80a-1(b).
The ICA was the counterpart in the area of mutual fund
regulation to the Securities Act of 1933 and the Securities
Exchange Act of 1934 (collectively, “the 1933 and 1934
Acts”), which were designed to regulate corporate securities.
Like the 1933 and 1934 Acts, the ICA requires registration
with the SEC and imposes specific reporting requirements.
See 15 U.S.C. §§ 80a-8, 80a-29. Section 8 of the ICA states
that once an investment company registers with the SEC, it
must file a registration statement that contains a recital of cer-
tain types of investment policies adopted by the company,
including the company’s policy with respect to concentration
of investments in a particular industry or group of industries;
any policy that is only changeable through a shareholder vote;
and any policy the company deems “fundamental.” 15 U.S.C.
§ 80a-8(b). Section 30 of the ICA states that investment com-
panies must file annual reports with the SEC, and that they
must transmit financial reports to shareholders on at least a
semi-annual basis. 15 U.S.C. § 80a-29(a), (e).
The ICA, however, created a broader regulatory framework
for investment companies than the 1933 and 1934 Acts cre-
ated for corporate securities. See 6 Thomas Lee Hazen, Trea-
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11411
tise on the Law of Securities Regulation § 20.6 (6th ed. 2009).
As one commentator has observed, “a significant focus of the
[ICA] is corporate governance and other substantive require-
ments for investment companies and affiliated entities,”
which “is in stark comparison to Congress’s focus on registra-
tion and disclosure” in the 1933 and 1934 Acts. Knickle,
supra, 23 Ann. Rev. Banking & Fin. L. at 781. This is
reflected in the legislative history, where the Senate Report
stated that the 1933 and 1934 Acts “ha[d] been ineffective to
correct abuses and deficiencies in investment companies.” S.
Rep. No. 76-1775, at 11. As one means of correcting these
abuses and deficiencies, § 13 of the ICA prohibits investment
companies from changing certain investment policies
included in their registration statements without first obtain-
ing shareholder approval. Subsection (a) states:
(a) No registered investment company shall, unless
authorized by the vote of a majority of its out-
standing voting securities—
(1) change its subclassification as defined
in section 80a-5(a)(1) and (2) of this
title or its subclassification from a
diversified to a non-diversified com-
pany;
(2) borrow money, issue senior securities,
underwrite securities issued by other
persons, purchase or sell real estate or
commodities or make loans to other
persons, except in each case in accor-
dance with the recitals of policy con-
tained in its registration statement in
respect thereto;
(3) deviate from its policy in respect of
concentration of investments in any
particular industry or group of indus-
11412 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
tries as recited in its registration state-
ment, deviate from any investment
policy which is changeable only if
authorized by shareholder vote, or
deviate from any policy recited in its
registration statement pursuant to sec-
tion 80a-8(b)(3) of this title; or
(4) change the nature of its business so as
to cease to be an investment company.
15 U.S.C. § 80a-13(a).
To ensure compliance with the requirements of the ICA,
Congress gave the SEC broad authority to police violations of
the Act. Section 42(a) of the ICA states that the SEC
may make such investigations as it deems necessary
to determine whether any person has violated or is
about to violate any provision of [the ICA] or of any
rule, regulation, or order hereunder, or to determine
whether any action in any court or any proceeding
before the [SEC] shall be instituted under [the ICA]
against a particular person or persons, or with
respect to a particular transaction or transactions.
15 U.S.C. § 80a-41(a). Section 42(d) and (e) authorize the
SEC to initiate actions in federal court for injunctive relief or
civil penalties against any person or entity the Commission
suspects of violating the ICA. See 15 U.S.C. § 80a-41(d)-(e).
Additionally, Congress granted the SEC discretion to make
exemptions consistent with public interest and policy. Section
6(c) of the ICA states that the Commission
may conditionally or unconditionally exempt any
person, security, or transaction, or any class or
classes of persons, securities, or transactions, from
any provision or provisions of [the ICA] or of any
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11413
rule or regulation thereunder, if and to the extent that
such exemption is necessary or appropriate in the
public interest and consistent with the protection of
investors and the purposes fairly intended by the pol-
icy and provisions of [the ICA].
15 U.S.C. § 80a-6(c).
Only one section of the ICA as originally enacted autho-
rized anyone other than the SEC to sue for violations of the
Act. Section 30(f) of the 1940 Act incorporated a remedy
under the 1934 Act. The section subjected officers, directors,
advisory board members, investment advisors, and affiliates
of closed-end investment companies, as well as all beneficial
owners of ten percent or more of the company’s securities, to
“the same duties and liabilities as those imposed by section 16
of the Securities Exchange Act of 1934 upon certain benefi-
cial owners, directors, and officers in respect of their transac-
tions in certain equity securities.” Pub. L. No. 76-768, § 30(f),
54 Stat. 789, 837 (1940) (now codified at 15 U.S.C. § 80a-
29(h)). Section 16(b) of the 1934 Act states that those individ-
uals subject to its requirements may be sued “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” to recover short-swing profits realized by
a regulated individual. 15 U.S.C. § 78 p(b). The Supreme
Court has said that by incorporating the provisions of § 16(b)
of the 1934 Act into § 30(f) of the ICA, Congress expressly
authorized private suits for damages against closed-end
investment company insiders who make short-swing profits.
Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11,
20 & n.10 (1979). There was no other authorization for pri-
vate suits in the original Act of 1940.
II. 1970 Amendments
Congress did not make any major amendments to the ICA
until 1970. See Investment Company Amendments Act of
11414 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
1970, Pub. L. No. 91-547, 84 Stat. 1413 (1970). Those
amendments included relatively minor changes to §§ 8 and
13. See id. §§ 2(b), 3(c), & 3(d), 84 Stat. at 1414, 1415. The
original § 8(b)(2) of the ICA required an investment compa-
ny’s registration statement to contain a recital of all invest-
ment policies “which the registrant deems matters of
fundamental policy.” Pub. L. No. 76-768, § 8(b)(2), 54 Stat.
at 804 (now codified as amended at 15 U.S.C. § 80a-8(b)(3)).
The 1970 amendments added the requirement that a compa-
ny’s registration statement also contain a recital of all invest-
ment polices “which are changeable only if authorized by
shareholder vote.” Pub. L. No. 91-547, § 3(c)(1), 84 Stat. at
1415 (codified at 15 U.S.C. § 80a-8(b)(2)). In a corresponding
amendment, Congress supplemented the language in
§ 13(a)(3), which originally said an investment company
could not, without shareholder approval, “deviate from its
policy in respect of concentration of investments in any par-
ticular industry or group of industries as recited in its registra-
tion statement, or deviate from any fundamental policy recited
in its registration statement.” Pub. L. No. 76-768, § 13(a)(3),
54 Stat. at 811. The 1970 amendment added a limitation bar-
ring an investment company from deviating, without share-
holder approval, “from any investment policy which is
changeable only if authorized by shareholder vote.” Pub. L.
No. 91-547, § 3(d), 84 Stat. at 1415 (codified at 15 U.S.C.
§ 80a-13(a)(3)).
Congress made these changes to §§ 8 and 13 to clarify that
an investment company violates § 13(a) whenever it deviates,
without shareholder approval, from an investment policy that
its registration statement says is changeable only by share-
holder vote, even if the registration statement does not also
identify the policy as “fundamental.” See H.R. Rep. No. 91-
1382, at 19 (1970). Both Congress and the SEC agreed this
amendment was necessary in light of a federal district court’s
ruling that an investment company must label an investment
policy as “fundamental” in its registration statement before
the company could be held liable under § 13(a) for deviating
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11415
from the policy, even if the company’s registration statement
said that the policy could not be changed without shareholder
approval. Id. (citing Green v. Brown, 276 F. Supp. 753
(S.D.N.Y. 1967), rev’d, 398 F.2d 1006 (2d Cir. 1968)). Con-
gress wanted to prevent any further confusion. Id.
The 1970 amendments to the ICA also included changes to
§ 36, which deals with actions for breach of fiduciary duty.
Because mutual funds are usually managed by separately
owned and operated investment advisors rather than by the
investment companies themselves, Congress added § 36(b),
which imposed an explicit fiduciary duty on a fund’s invest-
ment advisor with respect to the management fees it receives.
Pub. L. 91-547, § 20, 84 Stat. at 1429 (codified at 15 U.S.C.
§ 80a-35(b)); H.R. Rep. No. 91-1382, at 7; S. Rep. No. 91-
184, at 5-6 (1969). Section 36(b) also authorized the security
holders of a registered investment company to bring a deriva-
tive suit against the company’s investment advisor and its
affiliates for breach of that duty. 15 U.S.C. § 80a-35(b).
III. Sudan Accountability and Divestment Act of 2007
The amendments to the ICA with which we are principally
concerned in this appeal came in 2007 in response to the crisis
in Darfur, Sudan. That year, Congress imposed economic
sanctions on two Sudanese government officials and thirty-
one Sudanese companies as a result of their involvement with
the genocide in Darfur. S. Rep. No. 110-213, at 2 (2007).
Those sanctions barred the subject companies from doing
business within the United States financial system or with
United States companies, and prohibited United States citi-
zens from doing business with the Sudanese companies. Id. In
addition to the sanctions imposed by the federal government,
several states “enacted measures restricting their agencies’
economic transactions with firms that do business with, or in,
Sudan.” Id. They were joined in their efforts by “many col-
leges and universities, large cities, non-profit organizations,
and numerous pension and mutual funds.” Id. at 2-3.
11416 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
To facilitate the efforts of state and local governments and
private asset fund managers to divest from companies
involved in four specific business sectors in Sudan, Congress
enacted the SADA in 2007. Id. at 1, 4. Congress sought to
allow such divestment “to reduce the financial or reputational
risk associated with investments in a country subject to inter-
national sanctions.” Id. at 1-2; see also id. at 6-7. With respect
to private divestment, § 4 of the SADA, entitled “Safe Harbor
for Changes of Investment Policies by Asset Managers,”
amended § 13 of the ICA by adding a new subsection (c).
Pub. L. No. 110-174, § 4(a), 121 Stat 2519-20 (codified as
amended at 15 U.S.C. § 80a-13(c)). Subsection (c) expressly
barred any kind of civil, criminal, or administrative action
against an investment company to challenge the company’s
divestment from the securities of companies conducting the
affected business operations in Sudan. Id. It stated:
(c) Limitation on actions
(1) In general
Notwithstanding any other provision of
Federal or State law, no person may bring
any civil, criminal, or administrative action
against any registered investment company,
or any employee, officer, director, or
investment adviser thereof, based solely
upon the investment company divesting
from, or avoiding investing in, securities
issued by persons that the investment com-
pany determines, using credible informa-
tion that is available to the public, conduct
or have direct investments in business oper-
ations in Sudan described in section 3(d) of
the Sudan Accountability and Divestment
Act of 2007.
(2) Applicability
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11417
(A) Actions for breaches of fiduciary
duties
Paragraph (1) does not prevent a person
from bringing an action based on a
breach of a fiduciary duty owed to that
person with respect to a divestment or
non-investment decision, other than as
described in paragraph (1).
(B) Disclosures
Paragraph (1) shall not apply to a regis-
tered investment company, or any
employee, officer, director, or investment
adviser thereof, unless the investment
company makes disclosures in accor-
dance with regulations prescribed by the
Commission.
(3) Person defined
For purposes of this subsection the term
“person” includes the Federal Government
and any State or political subdivision of a
State.
Id. (emphasis added). The report from the Senate Committee
on Banking, Housing, and Urban Affairs explained that the
purpose of § 13(c) was to “provide[ ] a ‘safe harbor’ for those
divestment decisions made in accordance with the [SADA].”
S. Rep. No. 110-213, at 7.
In July 2010, months after this appeal was argued and more
than two years after the investments that led to the filing of
the complaint, Congress enacted the Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2010 (“Iran
Act”), Pub. L. No. 111-195, 124 Stat. 1312 (2010). As rele-
11418 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
vant to this appeal, the Iran Act amended ICA § 13(c)(1) to
add a safe harbor for investment companies divesting from
certain investments in Iran, and rewrote § 13(c)(2)(A) to say:
Nothing in [§ 13(c)(1)] shall be construed to create,
imply, diminish, change, or affect in any way
whether or not a private right of action exists under
[§ 13(a)] or any other provision of [the ICA].
Id. §§ 203(a), 205(b)(1), 124 Stat. at 1343, 1345. Congress
specified that the amendment to § 13(c)(2)(A) “shall apply as
if included in the [SADA].” Id. § 205(b)(2), 124 Stat. at 1345.
The Conference Report for the Iran Act stated that this
amendment was “designed to clarify that Congress did not
intend, in the [SADA], to imply the creation of a new private
right of action under the [ICA].” H.R. Rep. No. 111-512, at
67 (2010).
BACKGROUND OF THIS LITIGATION
This litigation has nothing to do with divestment from the
securities of companies doing business in Sudan. Rather, it
involves claims by investors that a large American investment
trust operating a series of mutual funds unlawfully deviated
from the investment policies set forth in its registration state-
ment, to the detriment of the fund’s shareholders and in viola-
tion of § 13(a) of the ICA.
Defendant-Appellant Schwab Investments is an investment
trust organized under Massachusetts law that consists of a
series of mutual funds. In 1993, Schwab Investments initiated
the Schwab Long-Term Government Bond Fund. By vote of
that fund’s shareholders in 1997, Schwab Investments con-
verted the fund into the Schwab Total Bond Market Fund
(“Fund”), a fixed-income mutual fund that seeks to track the
Lehman Brothers U.S. Aggregate Bond Index (“Lehman
Index”). The Fund hired Defendant-Appellant Charles Sch-
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11419
wab Investment Management, Inc. (“Charles Schwab”) as its
investment advisor.
The Fund’s stated investment objective is “to attempt to
provide a high level of current income consistent with preser-
vation of capital by seeking to track the investment results of
[the Lehman Index] through the use of an indexing strategy.”
The Fund disclosed in its registration statement that this
investment policy was “fundamental, which means that it may
be changed only by vote of a majority of [the] Fund’s share-
holders.” The Fund’s concentration policy says that the Fund
may not invest twenty-five percent or more of the Fund’s total
assets in any one industry or group of industries, unless neces-
sary to track the Lehman Index.
Plaintiff-Appellee Northstar Financial Advisors, Inc.
(“Northstar”) is a registered investment advisory and financial
planning firm that manages discretionary and non-
discretionary accounts on behalf of investors and had over
200,000 shares of the Fund under its management. In August
2008, Northstar filed this shareholder class action in district
court against Schwab Investments and Charles Schwab (col-
lectively, “Schwab”) for violations of ICA § 13(a). Northstar
seeks to represent a class of investors who owned shares of
the Fund from August 31, 2007, to the present.
Northstar’s primary claim is that Schwab violated § 13(a)
when it allegedly deviated from the Fund’s fundamental
investment policies. Northstar, 609 F. Supp. 2d at 940. North-
star alleges the deviations exposed the Fund and its sharehold-
ers to tens of millions of dollars in losses stemming from a
sustained decline in the value of non-agency mortgage-backed
securities. Id. Northstar’s complaint also includes state law
claims for breach of fiduciary duty, breach of contract, and
breach of the covenant of good faith and fair dealing that are
not at issue in this appeal. Id. at 948-50.
Schwab moved to dismiss the action for lack of standing on
the part of Northstar, asserting that Northstar could not raise
11420 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
claims on behalf of its clients, who are the actual shareholders
of the Fund. Id. at 941. The district court granted this motion,
but permitted Northstar to amend its complaint to reflect its
standing as the assignee of a client-shareholder, and standing
is not an issue in this appeal. Id. at 942.
Schwab also moved to dismiss for failure to state a claim
under ICA § 13(a), asserting there is no private right of action
to enforce that section’s terms. Id. at 943. The district court
denied this motion, holding that there is an implied private
right of action under § 13(a). Id. at 944. The court first
rejected Northstar’s assertion that this court had already con-
clusively decided the issue in Lapidus v. Hecht, 232 F.3d 679
(9th Cir. 2000), correctly observing that this court merely
assumed without deciding in that case that an implied private
right of action exists under § 13(a). Northstar, 609 F. Supp.
2d at 943 (citing Lapidus, 232 F.3d at 681 n.4). The court then
declined to adopt the Second Circuit’s reasoning in Olmsted
to deny a private right to enforce § 13(a), because Olmsted
“predated” the 2007 amendment of § 13 by the SADA. Id. at
944. Relying on the language of subsection (c) added to § 13
by the SADA, the court held that Congress recognized a pri-
vate right to enforce § 13(a) when it enacted § 13(c). Id. at
944-45. The court reasoned that there was no basis for Con-
gress to bar actions based on Sudanese divestments if the stat-
ute did not authorize other private causes of action. The
district court said:
The Court finds it significant that Section 13(c)
expressly limited the types of actions that a “person”
could file under Section 13. If there were no private
right of action under Section 13(a), there would be
no need to restrict the actions that could be filed
under Section 13. [Schwab] argue[s] Section 13(c)
cannot be read as referring to Section 13(a) or any
other specific statutory provision, and they note that
there is nothing in the legislative history suggesting
that Section 13(c) was meant to imply a private right
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11421
of action under Section 13(a). However, if Congress
intended for Section 13(c) to operate as a stand alone
“safe harbor” provision, Congress easily could have
added Section 13(c) as an entirely new provision of
the ICA rather than amending Section 13, or could
have stated that there was no private enforcement of
Section 13 whatsoever. The fact that Congress only
limited certain types of actions suggests that Con-
gress intended that there be a private right of action
under Section 13(a).
Id. at 944-45.
Recognizing, however, that the issue of whether there is an
implied private right of action to enforce § 13(a) is not free
from doubt, the district court certified its decision for interloc-
utory appeal, which this court accepted. See 28 U.S.C.
§ 1292(b).
ANALYSIS
We must now decide whether there is a private right to
enforce § 13(a) of the ICA. This is a question of statutory
construction that we review de novo. In re Digimarc Corp.
Derivative Litig., 549 F.3d 1223, 1229 (9th Cir. 2008). “[T]he
fact that a federal statute has been violated and some person
harmed does not automatically give rise to a private cause of
action in favor of that person.” Touche Ross & Co. v. Reding-
ton, 442 U.S. 560, 568 (1979) (quoting Cannon v. Univ. of
Chicago, 441 U.S. 677, 688 (1979)) (internal quotation marks
omitted). Instead, the statute must either explicitly create a
private right of action or implicitly contain one. In re Digi-
marc, 549 F.3d at 1230. Both parties in this appeal agree that
§ 13(a) does not expressly create a private right of action.
Accordingly, if there is any private right to enforce § 13(a),
it must be implied from the statute’s language, structure, con-
text, and legislative history. Id.; Opera Plaza Residential Par-
11422 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
cel Homeowners Ass’n v. Hoang, 376 F.3d 831, 836 (9th Cir.
2004). As the party seeking to establish a private right to
enforce § 13(a), the burden rests with Northstar to demon-
strate that such a private right of action exists. Opera Plaza,
376 F.3d at 835. For the reasons explained below, Northstar
has not met this burden.
I. Language and Structure of the Act
Our analysis of whether § 13(a) contains an implied private
right of action begins with the language and structure of the
statute itself. Alexander v. Sandoval, 532 U.S. 275, 288
(2001); In re Digimarc, 549 F.3d at 1231. This is because
congressional intent to create a private right of action is the
“key inquiry” in determining whether an implied private right
to enforce the statute exists. Opera Plaza, 376 F.3d at 835;
see also Orkin v. Taylor, 487 F.3d 734, 739 (9th Cir. 2007).
In analyzing the language of § 13(a), we look for the presence
of any “rights-creating language” that might imply Congress
intended to confer upon shareholders the right to sue an
investment company for violating the statute’s requirements.
See Sandoval, 532 U.S. at 288-89; In re Digimarc, 549 F.3d
at 1231-32. We then look to the structure of the ICA itself.
We have observed that “analogous provisions [of the statute]
expressly providing for private causes of action can imply
congressional intent not to create an implied cause of action.”
Opera Plaza, 376 F.3d at 836 (citing Touche Ross, 442 U.S.
at 571-74). We also look to see whether Congress designated
a method of enforcement other than through private lawsuits,
because “[t]he express provision of one method of enforcing
a substantive rule suggests that Congress intended to preclude
others.” Sandoval, 532 U.S. at 290.
[1] We turn first to whether the statute contains any lan-
guage that would imply Congress intended to allow private
enforcement of the statute’s requirements, what in Sandoval
is termed “rights-creating language.” Id. at 288. Section 13(a)
contains none. Instead, § 13(a) is focused on limiting the
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11423
types of actions an investment company can take without first
obtaining shareholder approval. “Statutes that focus on the
person regulated rather than the individuals protected create
‘no implication of an intent to confer rights on a particular
class of persons.’ ” Id. at 289 (quoting California v. Sierra
Club, 451 U.S. 287, 294 (1981)). This is because there is “far
less reason to infer a private remedy in favor of individual
persons if Congress, instead of drafting [the statute] with an
unmistakable focus on the benefitted class,” writes it “simply
as a ban on” or “as a prohibition against” undesirable conduct
by a regulated entity. Cannon, 441 U.S. at 690-92.
[2] Here, as in the district court, Northstar contends that in
Lapidus we already construed the statute as creating a private
right. The district court correctly said we did not. Northstar,
609 F. Supp. 2d at 943. As the district court explained, we
found it unnecessary in Lapidus to reach the question of
whether § 13(a) creates an implied private right of action. Id.
This was because the district court in Lapidus had dismissed
the plaintiffs’ § 13(a) claims for lack of subject matter juris-
diction and not for failure to state a claim. Lapidus, 232 F.3d
at 681. We said in a footnote in Lapidus that the existence of
a private right to enforce § 13(a) could be “assumed without
being decided” to resolve the jurisdictional question before
us, because “the question whether a cause of action exists is
not a question of jurisdiction.” Id. at 681 n.4 (quoting Burks
v. Lasker, 441 U.S. 471, 476 n.5 (1979)) (internal quotation
marks and citation omitted). We resolved the jurisdictional
question in the plaintiffs’ favor, and remanded to the district
court for consideration in the first instance of the defendants’
other asserted grounds for dismissal. Id. at 684. On remand,
the district court dismissed the plaintiffs’ claims for failure to
state a claim without addressing whether § 13(a) creates an
implied private right of action. Lapidus v. Hecht, 2002 WL
1034042 (N.D. Cal. May 17, 2002). The language of the stat-
ute does not imply a private remedy, and we have never held
that it did.
11424 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
[3] We next turn to the structure of the ICA to determine
whether it suggests any congressional intent to allow private
enforcement. Our Circuit has not done this analysis, but the
Second Circuit, twice in the past decade, has analyzed the
ICA’s statutory scheme for evidence of congressional intent
to create a private right of action to enforce other sections of
the Act, and has concluded that no such evidence exists. See
Bellikoff, 481 F.3d at 116-17 (holding there is no private right
of action to enforce ICA §§ 34(b), 36(a), and 48(a)); Olmsted,
283 F.3d at 432-33 (holding there is no private right of action
to enforce ICA §§ 26(f) and 27(i)). In both Bellikoff and Olm-
sted, the Second Circuit focused on the fact that § 42 of the
ICA, 15 U.S.C. 80a-41, authorizes SEC enforcement of the
ICA, and that Congress actually created an express private
right of action against investment advisors for breach of cer-
tain fiduciary duties in § 36(b). This led the Second Circuit to
conclude that Congress did not intend to imply a private right
to enforce other sections of the ICA. See Bellikoff, 481 F.3d
at 116-17; Olmsted, 283 F.3d at 433.
[4] We now agree with the Second Circuit that the struc-
ture of the ICA does not indicate that Congress intended to
create an implied private right to enforce the individual provi-
sions of the Act. In §§ 6 and 42 of the ICA, Congress
expressly authorized the SEC to enforce all of the provisions
of the Act by granting the Commission broad authority to
investigate suspected violations; initiate actions in federal
court for injunctive relief or civil penalties; and create exemp-
tions from compliance with any ICA provision, consistent
with the statutory purpose and the public interest. 15 U.S.C.
§§ 80a-6(c), 80a-41. This thorough delegation of authority to
the SEC to enforce the ICA strongly suggests Congress
intended to preclude other methods of enforcement. Sandoval,
532 U.S. at 290. The Supreme Court has also cautioned that
“where a statute expressly provides a particular remedy or
remedies, a court must be chary of reading others into it.”
Transamerica, 444 U.S. at 19. Because the statutory scheme
of the ICA provides for thorough SEC enforcement of the
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11425
Act’s provisions, including § 13(a), “it is highly improbable
that Congress absentmindedly forgot to mention an intended
private action.” Id. at 20 (internal quotation marks and cita-
tion omitted).
[5] Moreover, it is evident from the text of the ICA that
Congress knew how to create a private right of action to
enforce a particular section of the Act when it wished to do
so. In § 30(f) of the original 1940 Act (now codified at 15
U.S.C. § 80a-29(h)), Congress expressly authorized private
suits for damages against insiders of closed-end investment
companies who make short-swing profits. Transamerica, 444
U.S. at 20 & n.10. Congress created a second express private
right of action in 1970 when it added § 36(b) to the ICA,
which allows shareholders to sue an investment company’s
advisor and its affiliates for breach of certain fiduciary duties
relating to management fees. 15 U.S.C. § 80a-35(b); Bellikoff,
481 F.3d at 116; Olmsted, 283 F.3d at 433. Congress’s enact-
ment of these two express private rights of action elsewhere
in the ICA, without the enactment of a corresponding express
private right of action to enforce § 13(a), indicates that Con-
gress did not, by its silence, intend a private right of action to
enforce § 13(a). See In re Digimarc, 549 F.3d at 1232-33.
Despite this strong evidence from the language of § 13(a)
and the ICA’s statutory scheme that Congress did not intend
to create a private right of action to enforce § 13(a), Northstar
argues that such a right can be implied from §§ 1, 33, and 44
of the Act. We disagree, as none of these sections demonstrate
that Congress intended private enforcement of each of the
provisions of the ICA.
Section 1, the congressional findings and declaration of
policy, contains general language indicating that one of the
purposes of the Act is to protect investors. 15 U.S.C. § 80a-1.
That is a key function of the SEC. This general language does
not demonstrate that Congress intended the ICA to be
enforced by any entity other than the SEC. See Sandoval, 532
11426 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
U.S. at 290; Transamerica, 444 U.S. at 24 (“[T]he mere fact
that [a] statute was designed to protect [one class of individu-
als] does not require the implication of a private cause of
action for damages on their behalf.”); Touche Ross, 442 U.S.
at 578 (“[G]eneralized references to the ‘remedial purposes’
of [an act] will not justify reading a provision ‘more broadly
than its language and the statutory scheme reasonably per-
mit.’ ” (quoting SEC v. Sloan, 436 U.S. 103, 116 (1978))).
Section 33 does nothing more than require investment com-
panies and their affiliates to file certain litigation documents
with the SEC whenever an investment company or one of its
affiliates is a party to a suit against an officer, director, invest-
ment advisor, trustee, or depositor of the investment com-
pany. 15 U.S.C. § 80a-32. This filing requirement does not
imply that Congress anticipated private suits against invest-
ment companies for violations of the ICA; the requirement
applies to “any action or claim” and is not solely directed to
suits for violations of the ICA. Id.
Section 44 is the ICA’s jurisdictional provision; it grants
concurrent federal and state jurisdiction over “all suits in
equity and actions at law” brought to enforce the provisions
of the entire ICA. 15 U.S.C. § 80a-43. It does not create a pri-
vate right of action to enforce § 13(a). The entity entitled to
sue for violations must be identified in the substantive provi-
sion of the act. See Touche Ross, 442 U.S. at 577 (“The
source of plaintiffs’ rights must be found, if at all, in the sub-
stantive provisions of the [act] which they seek to enforce, not
in the jurisdictional provision.”).
II. Legislative History of Amendments to the Act
Northstar goes on to argue that even if the Act’s language
does not imply a private right to sue, the statute’s legislative
history, specifically the amendments to §§ 8 and 13 enacted
in 1970 and 2007, demonstrates that Congress intended there
to be an implied private right of action to enforce § 13(a). We
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11427
must disagree, because nothing in the language or context of
those amendments demonstrates a clear congressional intent
to allow private lawsuits to enforce the statute’s provisions.
A. The 1970 Amendments
[6] Congress amended §§ 8 and 13 in 1970 to make it clear
that an investment company’s registration statement must
recite all policies that can be changed only by shareholder
vote and that deviation from any policy so designated violates
§ 13(a). Northstar contends that when Congress amended
these two sections, it meant to affirm its original intent to
create a private right of action under § 13(a). No such mean-
ing or intent is apparent. The amendments deal with the need
for shareholder votes to change investment policy. The lan-
guage and legislative history reflect that purpose and that pur-
pose only.
[7] The report of the House Committee on Interstate and
Foreign Commerce states that the purpose of the amendments
was “to make clear that deviation from an investment policy
which is changeable only by shareholder vote constitutes a
violation of section 13,” regardless of whether the investment
company’s registration statement explicitly identifies the pol-
icy as “fundamental.” H.R. Rep. No. 91-1382, at 19. By clari-
fying when a change of policy violates § 13(a), Congress did
not thereby indicate an intent to recognize a private remedy
for such a violation.
Northstar further contends that the 1970 amendments
affirmed a contemporary federal court interpretation of
§ 13(a) as privately enforceable. Northstar tries to invoke the
principle that when an implied cause of action is part of the
“contemporary legal context” in which Congress amends a
statute, and a significant amendment of the statute leaves
intact the provisions the courts relied on for implying a cause
of action, Congress intends the cause of action to remain. In
this situation, the lack of change “is itself evidence that Con-
11428 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
gress affirmatively intended to preserve that remedy.” Merrill
Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353,
381-82 (1982). It is only evidence, however. The Supreme
Court has cautioned that “dispositive weight” should not be
given to the expectations Congress has with respect to the
contemporary legal context. Sandoval, 532 U.S. at 287-88.
Here, we can give the expectations no weight, because
there was no “contemporary legal context” in 1970, when
Congress amended §§ 8 and 13 recognizing a private right of
action under § 13(a). Northstar cites to only two cases — both
from federal district courts — to support its theory that there
was such a context: Green v. Brown, 276 F. Supp. 753
(S.D.N.Y. 1967), and Leighton v. The One William Street
Fund, Inc., 1965 U.S. Dist. LEXIS 9430 (S.D.N.Y. July 2,
1965).
Even assuming two district court, and hence non-
precedential, cases could provide a legal context, neither
Green nor Leighton actually held that there was an implied
private right to enforce § 13(a). In Green, a stockholder of an
investment company brought a derivative action against the
company and its directors, alleging the defendants violated
§ 13(a) of the ICA by concentrating the company’s invest-
ments in a manner contrary to the investment policy contained
in the company’s registration statement. See 276 F. Supp. at
754. The district court granted the defendants’ motion for
summary judgment, holding that the defendants had not vio-
lated § 13(a) because the company’s registration statement did
not characterize the investment policy at issue as a “funda-
mental policy,” even though the registration statement said
the policy could not be changed without shareholder approval.
Id. at 755-56. The question of whether a private right of
action to enforce § 13(a) even existed was not raised by any
of the parties and was not addressed in the district court’s
decision. The House Report and other portions of the legisla-
tive history relating to the 1970 amendments to §§ 8 and 13
indicate that Congress was, of course, aware of Green,
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11429
because it wanted to clarify the confusion Green had created
about the need for shareholder votes. See H.R. Rep. No. 91-
1382, at 19. There is no indication Congress thought the case
stood for anything else. The amendments made it clear that
any unapproved deviation from policies the registration state-
ment says require a shareholder vote violate § 13(a).
The earlier district court case, Leighton, also involved
whether shareholder approval was needed. In Leighton, a
stockholder challenged an investment fund’s decision to hire
a certain investment advisor as its broker and to pay that advi-
sor brokerage commissions. 1965 U.S. Dist. LEXIS 9430, at
*6-8. The stockholder argued that decision, made without
shareholder approval, amounted to a change in fundamental
policy in violation of § 13(a) of the ICA. Id. at *6-7. The dis-
trict court rejected this claim, entering summary judgment on
behalf of the fund and its advisor because the fund’s registra-
tion statement was silent on the matter of brokerage commis-
sions. Id. at *7-8. The non-published opinion does not discuss
the existence of a private right to enforce § 13(a). It held there
had been no violation of § 13(a). Even if Congress had been
aware of the Leighton decision when it amended §§ 8 and 13
in 1970, it could not have believed the amendments affirmed
any recognition in Leighton of a private right to enforce
§ 13(a).
B. The 2007 Amendments
[8] Northstar’s stronger argument, the one the district court
accepted, is that Congress recognized a preexisting private
right of action to enforce § 13(a) when it enacted the SADA
in 2007 and added § 13(c) to the ICA. Section 13(c) is a broad
prohibition of remedies for a narrow purpose. It prohibits the
availability of any remedy or cause of action pertaining to an
investment company’s divestment from, or failure to invest in,
securities of entities, but only of those that do business in the
oil, power production, mineral extraction, or military equip-
ment sectors of Sudan. See 15 U.S.C. § 80a-13(c)(1)(A). It is
11430 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
a broad prohibition because it bars all civil, criminal, and
administrative actions, including state as well as federal
claims, and it begins with the sweeping phrase
“[n]otwithstanding any other provision of Federal or State
law.” Id. It has narrow application because it applies to Suda-
nese divestments.
[9] Section 13(c) thus is a bar to actions any person or gov-
ernment agency might file to challenge divestment from
Sudanese investments. The district court found it significant
that § 13(c) referred to actions that a “person” could file, and
that it included actions under § 13. Northstar, 609 F. Supp. 2d
at 944. The court reasoned that “[i]f there were no private
right of action under Section 13(a), there would be no need to
restrict the actions that could be filed under Section 13.” Id.
Thus, the argument concludes, Congress’s use of the word
“person” in § 13(c) must mean that private persons, and not
just the SEC, are otherwise authorized to bring an action for
a violation of § 13(a).
[10] This argument would have some validity if the Suda-
nese bar in § 13(c) applied only to causes of action to enforce
the other provisions of § 13, including § 13(a). But the bar is
not so limited. The § 13(c) bar extends to any civil, criminal,
or administrative action brought under any state or federal
law. Thus, Congress included the term “person” to describe
the entities restricted from bringing the types of actions barred
by § 13(c), because a wide range of “persons” are potential
plaintiffs when all possible civil, criminal, and administrative
actions under both state and federal law are considered. Con-
gress meant to bar all such potential plaintiffs from remedies
for divestment. It did not limit the Sudanese bar to plaintiffs
under § 13(a). Thus, we conclude Congress did not use the
word “person” as recognition of a private right of action to
enforce § 13(a).
The legislative history of the SADA supports our interpre-
tation of the language of § 13(c) as barring actions beyond
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11431
those for violations of the provisions of § 13. According to the
report of the Senate Committee on Banking, Housing, and
Urban Affairs, a primary purpose of the SADA was to permit
public and private asset managers to adopt Sudanese divest-
ment measures without fear of legal reprisals. S. Rep. No.
110-213, at 1-2. To this end, § 4 of the SADA added § 13(c)
to the ICA to “allow[ ] private asset managers, if they so
choose, to divest from the securities of companies conducting
business operations in the power production, mineral extrac-
tion, oil, and military equipment sectors of Sudan,” and to
“provide[ ] a ‘safe harbor’ for those divestment decisions
made in accordance with the [SADA].” Id. at 6-7. Congress
could not have intended to restrict § 13(c)’s application solely
to causes of action arising from divestments that might other-
wise violate § 13(a).
Northstar nevertheless points to the heading of § 4 of the
SADA as indicating that Congress intended ICA § 13(c) to
apply only to causes of action arising from violations of ICA
§ 13(a). Section 4 of the SADA is entitled “Safe Harbor for
Changes of Investment Policies by Asset Managers.” Pub. L.
No. 110-174, § 4, 121 Stat. at 2519. The somewhat attenuated
argument is that the reference to “investment policies by asset
managers” mirrors the language in ICA § 13(a)(3), which pro-
hibits investment companies from deviating from certain
types of “investment policies” without shareholder approval.
Thus, Northstar concludes that § 4 of the SADA implies that
ICA § 13(c), which was added to the ICA by SADA § 4, was
explicitly intended to modify ICA § 13(a).
[11] Assuming, arguendo, that such a meaning can be
attached to the words in the title, the Supreme Court has cau-
tioned that “the title of a statute and the heading of a section
cannot limit the plain meaning of the text. For interpretative
purposes, they are of use only when they shed light on some
ambiguous word or phrase.” Bhd. of R.R. Trainmen v. Balti-
more & O.R. Co., 331 U.S. 519, 528-29 (1947). Here, the text
of ICA § 13(c) unambiguously applies to all actions that can
11432 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
be brought under “any other provision of Federal or State
law.” 15 U.S.C. § 80a-13(c)(1). It is not limited to actions for
violations of ICA § 13(a). Thus, Congress’s use of the term
“investment policy” both in the heading of SADA § 4 and in
the text of ICA § 13(a)(3) cannot be parsed to reflect any
intent to restrict § 13(c)’s application to violations of § 13(a),
much less to constitute a recognition of private causes of
action to challenge them.
Congress’s recent amendment of ICA § 13(c)(2)(A) is in
accord with our understanding of the relationship between
§ 13(a) and (c). This amendment expressly stated that
§ 13(c)(1) does not create or affect the existence of a private
right of action under § 13(a). It provides: “Nothing in
[§ 13(c)(1)] shall be construed to create, imply, diminish,
change, or affect in any way whether or not a private right of
action exists under [§ 13(a)] or any other provision of [the
ICA].” 15 U.S.C. § 80a-13(c)(2)(A). The amendment under-
mines the district court’s holding.
Northstar finally contends that when Congress enacted the
SADA in 2007, it affirmed a private cause of action courts
had recognized in the preceding 40 years. It contends there
was by 2007 “unanimous case law confirming the private
right of action.”
Northstar cites fifteen cases, yet in fourteen the issue was
either not squarely raised or not squarely decided. As we have
already seen, this court in Lapidus only assumed, without
deciding, that a private right of action exists under § 13(a).
See 232 F.3d at 681 n.4. In both Karpus v. Hyperion Capital
Mgmt., Inc., 1996 WL 668860, at *2 (S.D.N.Y. Nov. 18,
1996), and Potomac Capital Markets Corp. v. Prudential-
Bache Corporate Dividend Fund, Inc., 726 F. Supp. 87, 93
n.5 (S.D.N.Y. 1989), the district court acknowledged that the
issue of whether there is a private right of action to enforce
§ 13(a) had not been raised. Eleven of the other cases cited by
Northstar contain no discussion of the issue whatsoever. See,
NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS 11433
e.g., Hunt v. Alliance N. Am. Gov’t Income Trust, Inc., 159
F.3d 723, 731-32 (2d Cir. 1998); Rodney v. KPMG Peat Mar-
wick, 143 F.3d 1140, 1143 (8th Cir. 1998) (does not include
any claim brought under § 13(a)); Green, 398 F.2d at 1008;
Phillips v. Morgan Stanley Dean Witter High Income Advan-
tage Trust III, 2002 WL 31119441, at *3-4 (S.D.N.Y. Sept.
25, 2002); Lapidus, 2002 WL 1034042, at *2-9; Sheppard v.
TCW/DW Term Trust 2000, 938 F. Supp. 171, 180 n.7
(S.D.N.Y. 1996); Krounder v. Am. Heritage Fund, Inc., 899
F. Supp. 142, 148-49 (S.D.N.Y. 1995); Omni Fin. Corp. v.
Cohen, 1994 WL 97125, at *6-7 (S.D.N.Y. Mar. 22, 1994);
Monheit v. Carter, 376 F. Supp. 334, 339 (S.D.N.Y. 1974);
Green, 276 F. Supp. at 755-56; Leighton, 1965 U.S. Dist.
LEXIS 9430, at *6-8.
The one case in which the court did have such an issue
squarely before it and did hold that § 13(a) implies a private
right of action was Blatt v. Merrill Lynch, Pierce, Fenner &
Smith Inc., 916 F. Supp. 1343 (D.N.J. 1996). The district
court’s decision in Blatt, however, did not rely on the text or
history of § 13(a) itself. The court instead relied on § 7(d), 15
U.S.C. § 80a-7(d), and the court’s conclusion that a private
right of action existed to enforce that provision of the ICA.
Blatt, 916 F. Supp. at 1348-50, 1357. Section 7(d) prohibits
foreign investment companies from issuing securities in inter-
state commerce without first registering with the SEC. Sec-
tion 7(d) is unrelated to § 13(a). We believe the approach
taken in Blatt is in some tension with the Supreme Court’s
later teaching in Sandoval, requiring closer analysis of the
particular provision in question to determine the existence of
an implied private right of action. See Sandoval, 532 U.S. at
286-91.
Indeed, following the Supreme Court’s decision in Sando-
val, the modern trend has been for federal courts to deny the
existence of implied private rights of action under the ICA,
with many courts applying the analytical framework
employed by the Second Circuit in Olmsted and Bellikoff. See,
11434 NORTHSTAR FINANCIAL v. SCHWAB INVESTMENTS
e.g., W. Inv. LLC v. DWS Global Commodities Stock Fund,
Inc., ___ F. Supp. 2d ___, 2010 WL 1404208, *3-4 (S.D.N.Y.
Apr. 5, 2010) (holding there is no implied private right of
action under § 13(a)(3) of the ICA and rejecting district
court’s reasoning in this case in favor of the rationale relied
on in Olmsted and Bellikoff); In re Salomon Smith Barney
Mut. Fund Fees Litig., 441 F. Supp. 2d 579, 591-93 (S.D.N.Y.
2006) (holding there is no private right of action to enforce
§§ 34(b) and 48(a) of the ICA and citing other post-Olmsted
cases in the same district that reached the same conclusion);
In re Franklin Mut. Funds Fee Litig., 388 F. Supp. 2d 451,
464-67 (D.N.J. 2005) (holding there is no implied private
right of action to enforce §§ 34(b) and 36(a) of the ICA and
citing other post-Sandoval and post-Olmsted cases reaching
the same conclusion); Mutchka v. Harris, 373 F. Supp. 2d
1021, 1025-27 (C.D. Cal. 2005) (holding there is no implied
private right of action to enforce § 36(a) of the ICA); White
v. Heartland High-Yield Mun. Bond Fund, 237 F. Supp. 2d
982, 986-88 (E.D. Wis. 2002) (holding that §§ 22 and 34(b)
of the ICA do not create implied private rights of action).
In reversing the district court in this case, we follow the
conclusion reached by the Second Circuit in Olmsted and Bel-
likoff, and supported by the weight of contemporary authority,
that there is no implied private right of enforcement.
CONCLUSION
Neither the language of § 13(a), the structure of the ICA,
nor the statute’s legislative history, including the addition of
§ 13(c), the Sudanese amendment, in 2007, reflect any con-
gressional intent to create, or recognize a previously estab-
lished, private right of action to enforce § 13(a). The job of
enforcement remains exclusively with the SEC.
[12] The order of the district court is reversed and the mat-
ter remanded with instructions to grant Schwab’s motion to
dismiss Northstar’s federal claims.
REVERSED and REMANDED.