Plaut vs. Spendthrift Farm, Inc. (1995)

Facts:

In 1987, Spendthrift Farm, Inc. was sued by several of its shareholders, including Ed Plaut. The claims made against the corporation involved stock sales, from 1983 and 1984, allegedly violating the Securities Exchange Act of 1934, which stated requirements for all companies listed on the stock exchange. In 1991, the Supreme Court set, in Lampf vs. Gilbertson, a time limit of three years after an alleged violation involving suits relating to this Act. This led the district court judge presiding over the Plaut vs. Spendthrift Farm, Inc. case to dismiss the allegations. Congress then established the FDIC Improvement Act, in 1991,that required courts to reinstate all cases dismissed by the Lampf case. When the shareholders attempted to re-file the suit, they were denied by a district court judge on the grounds that Congress had violated separation of powers by requiring the matters to be re-opened. When appealed, the U.S. Court of Appeals upheld this conclusion on the same grounds.

The Question:

Whether or not Congress violated seperation of powers by requiring federal courts to reopen cases, restricted by the Lampf (1991) ruling, through the FDIC Improvement Act (1991).

Path to the Supreme Court:

In 1991, the Supreme Court ruled, in Lampf vs. Gilbertson, that there was a three year time limit from the time of the alleged violation, restricting violations relating to the Securities Exchange Act of 1934. Congress established the FDIC Improvement Act in response, requiring courts to reinstate all cases dismissed by this ruling. The Court of Appeals upheld that Congress had violated seperation of powers.

The Outcome:

The Court of Appeals upheld that Congress had violated seperation of powers through the establishment of the FDIC Improvement Act, and dismissed the requirement for courts to reinstate cases dismissed by the Lampf ruling.

Evaluation:

I agree with the ruling upheld by the Court of Appeals that Congress had violated seperation of powers through the FDIC Improvement Act. According to Article III, Congress has both judicial ability and the ability to define law, however it does not have the ability to "retroactive legislation, that is, legislation that prescribes what the law was at an earlier time," meaning that Congress does not have the ability the intrude upon the last words of lower courts in relation to a specific controversy.