514 U.S. 211
PROCEDURAL HISTORY: Petitioner investors sought review of the order from the United States Court of Appeals for the Sixth Circuit, which denied petitioner's motion to reinstate its action against respondent securities investment company, as the court found that § 27A of the Securities Exchange Act, 15 U.S.C.S. § 78aa-1, was unconstitutional.
-Petitioner investors previously brought an action against respondent securities investment company for fraud and deceit in the sale and exchange of stock in violation of § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78j(b) and Rule 10b-5of the Securities Exchange Commission, 17 C.F.R. 240.
-Petitioners' action was dismissed with prejudice and became final after petitioner did not file an appeal. Subsequently, § 27A of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78aa-1, was codified.
-Petitioners then sought to have their action reinstated pursuant to § 27A.
-The district court found that the section required the reinstatement of petitioners' action, yet found the section to be unconstitutional and denied petitioners' motion, which was affirmed by the appellate court.
-After granting certiorari, the Court found § 27A to be unconstitutional and affirmed the decision of the lower court. Section 27A, by retroactively commanding federal courts to reopen final judgments, violated the fundamental principle that a judgment conclusively resolves the case.
-Thus, the separation of powers principle was violated by § 27A, when Congress codified the section.
CONCLUSION: The court affirmed the lower court's finding that a provision of the Act was unconstitutional. The provision required the federal court to reopen petitioner investors' action against respondent investment company for violations of Securities Act that had previously been dismissed with prejudice and became final after petitioner did not appeal. Thus Congress, in codifying the provision, violated the separation of powers principle.
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