Hello, this is Jeff Barnum, reading the Supreme Court syllabus in FS Credit Opportunities Corporation et al. versus SABA Capital Master Fund Limited et al. search for the United States Court of Appeals for the Second Circuit. Argued December 10th, 2025, decided June 11th, 2026. The Investment Company Act, or ICA, comprehensively regulates investment companies. The ICA designates the Securities and Exchange Commission as its primary enforcer and expressly permits shareholders and issuers of securities to enforce two of its provisions. The question presented in this case is whether Section 47B of the ICA impliedly empowers private parties to sue for rescision of any contract that allegedly violates the Act. Petitioners or funds are investment companies that manage close-end mutual funds. These funds are closed because each contains a fixed number of shares issued at one time, and the price of each share is determined by trading on the open market. Respondents SABA Capital Master Fund Limited and SABA Capital Management LP, collectively SABA, engage in activist investing, a practice that involves identifying low-performing closed-end funds and purchasing a large enough stake to alter the fund's investment strategies. The funds are incorporated in Maryland, which has enacted the Maryland Control Share Acquisition Act, or MCSAA, and have adopted resolutions opting into MCSAA provisions that limit voting rights for shareholders holding a disproportionate number of shares, like activist investors, unless other shareholders approve. In June 2023, SABA sued the funds, alleging that the funds resolutions violate the ICA's requirement that every share of stock shall be a voting stock with equal voting rights. SABA's suit invoked Section 47B of the ICA, which provides that a court may not deny rescision of contracts that violate the ICA at the instance of any party, unless the court finds that doing so would be consistent with equity and the ICA's goals. The District Court held that Section 47B creates an implied private right of action to sue for contract rescission and granted save a summary judgment. The Second Circuit summarily affirmed. Held, Section 47B of the ICA does not implyly empower private parties to sue for rescision of contracts that allegedly violate the Act. Congress, not the judiciary, decides who may enforce federal law. When Congress creates a private right of action, it usually does so expressly. The court has rejected the practice of fashioning rights of action, because judicially created causes of action are difficult to reconcile with the Constitution's separation of legislative and judicial power. If a statute does not spell out a right of action, courts examine its text and structure to determine whether it implicitly provides one. To create a private right, a statute must use rights creating language aimed at protecting a particular class of persons. Language that focuses on the person regulated rather than the individuals protected does not suffice. And the existence of an express remedial scheme elsewhere in the statute may foreclose a private cause of action to enforce even those statutes that admittedly create substantive private rights. Section 47 of the ICA, entitled Validity of Contracts, provides that any contractual waiver of compliance with the ICA shall be void, and that contracts made in violation of the ICA are generally unenforceable unless specific circumstances are met. Relevant here, if such a contract has been performed, a court may not deny rescission at the instance of any party unless such court finds that under the circumstances the denial of rescission would produce a more equitable result than its grant, and would not be inconsistent with the purposes of this subchapter. The phrase rescission at the instance of any party does not imply that private parties may sue. Section 47B is a mandate directed to courts rather than a provision that confers a right on a specified class of persons. The key actor is a court, not an individual, and it is instructed not to deny the remedy of rescission to parties who request it for performed contracts unless the equities and ICA's goals favor a different result. Section 47B's wording presupposes that parties are already before the court and directs the court's use of its remedial authority. It says nothing about individual rights. Statutory structure points in the same direction. The Securities and Exchange Commission bears primary responsibility for ensuring compliance with the ICA and may investigate and bring enforcement actions in response to violations. Congress's decision to create a comprehensive agency enforcement scheme supports the conclusion that private parties generally cannot enforce the ICA. SAVA's counterarguments are unpersuasive. The phrase at the instance of any party ordinarily means at the solicitation or suggestion of directing a court's remedial power when a party before it is urging rescission. The phrase says nothing about conferring a right to sue in the first place. SAVA's reliance on Trans-American Mortgage Advisors Incorporated versus Lewis, or Tama, 444 U.S. 11, a Supreme Court case from 1979, which holds that the Investment Advisors Act, or IAA, creates an implied right of action based upon the phrase shall be void, is unavailing because Congress amended Section 47B in 1980, deleting the shall be void language on which Tama's reasoning turns and shifting the focus toward regulating a court's remedial authority. Congress made these changes despite retaining the phrase shall be void in the immediately preceding provision and in the IAA itself. Changed language typically indicates changed meeting, and that is true here. Even if Tama applied, it blesses only a limited private remedy to void an investment advisor's contract. Sava would wield Section 47B to void any type of contract that violates the ICA. Tama is thin support for such a sweeping right. Reversed and remanded. Justice Barrett delivered the opinion of the court in which Chief Justice Roberts and Justices Thomas Alito Gorsuch and Kavanaugh joined. Justice Kagan filed a dissenting opinion. Justice Jackson filed a dissenting opinion in which Justice Sodemeyer joined and in which Justice Kagan joined as to parts one and two. Thank you for listening. Please help us by rating and reviewing this podcast wherever you get your podcasts. And please make sure you subscribe so you can get all of the OT 25 decisions delivered to your device. If you wish to communicate with the podcast, please email us at ScodisDecisions at gmail.com or click the link in the show notes. Thanks and have a great day.