Roger J. Reschini, Appellant, v. First Federal Savings and Loan Association of Indiana;charles L. France, 46 F.3d 246 (3d Cir. 1995)

Thomas E. Sweeney, Jr., Sweeney & Associates, Pittsburgh, PA (argued), for appellant.

Walter A. Bunt, Jr. Kirkpatrick & Lockhart, Pittsburgh, PA (argued), for appellees.

Before: SLOVITER, Chief Judge, ROTH, Circuit Judge, and POLLAK, District Judge.^* 

OPINION OF THE COURT

LOUIS H. POLLAK, District Judge.

This appeal addresses the dismissal of a suit brought by appellant Roger J. Reschini against appellees First Federal Savings and Loan Association of Indiana (the "Association") and Charles L. France, the chief executive officer of the Association. The complaint alleged that the Association and its chief executive officer had disseminated materially misleading proxy materials in violation of regulations adopted by the federal Office of Thrift Supervision (OTS) in carrying out its supervision of federal savings associations. The allegedly deficient proxy materials sought approval by Association members of the proposed conversion of the Association from a federal (i.e., federally-chartered) mutual savings and loan association to a Pennsylvania-chartered mutual savings bank.

The district court held that Secs. 5(i) (2) (B) and 10(j) of the Home Owners' Loan Act (HOLA), 12 U.S.C. §§ 1464(i) (2) (B) and 1467a(j), giving courts of appeals original and exclusive jurisdiction over decisions of the Director of the OTS approving or disapproving conversions of federal savings associations, precluded exercise by the district court of subject matter jurisdiction over Reschini's claim. Accordingly, the district court dismissed the complaint for lack of jurisdiction. On appeal we consider three questions: (1) whether Reschini's appeal is moot; (2) whether 12 U.S.C. §§ 1464(i) (2) (B) and 1467a(j) constitute an insurmountable bar to district court subject-matter jurisdiction over challenges to proxy materials distributed in connection with the Association's conversion; and (3) if jurisdiction in the district court is not precluded, whether dismissal of this suit was nevertheless required on the ground that the complaint failed to state a cognizable cause of action.

* In late December of 1993 or early January of 1994, the Association distributed a notice to its members informing them that a special meeting would be held on January 28, 1994, for the purpose of voting on a conversion plan. Under the plan, the Association would abandon its federal charter and emerge as a Pennsylvania-chartered mutual savings bank known as the Indiana First Savings Bank. A proxy statement outlining the plan's business purposes and effects accompanied the notice.

Depositors in a federally-chartered mutual savings association are, pursuant to HOLA, members entitled to vote on proposals to convert to non-federal status,¹  notwithstanding that the proprietary interest of a depositor-member in a mutual savings association is a chimera. Depositor-members "own the mutual, but it is ownership in name only. They cannot sell what they 'own,' and if they withdraw savings they receive only the nominal value of the account rather than a portion of the mutual's net worth...." Ordower v. Office of Thrift Supervision, 999 F.2d 1183, 1185 (7th Cir. 1993). On January 25, 1994, Robert Reschini, in his capacity as a depositor-member of First Federal Savings and Loan Association of Indiana, brought suit in the Western District of Pennsylvania against the Association and Charles France, the Association's chief executive officer. Count I of Reschini's complaint, invoking the district court's federal question jurisdiction, alleged that the proxy statement, in contravention of 12 C.F.R. Sec. 569.4, contained false information regarding the principal business reasons for the proposed conversion and failed to disclose material information about the loss of member voting rights that would accompany the conversion. Reschini sought an injunction against the holding of the special meeting, an order prohibiting use of the proxy statement and requiring a legally sufficient proxy solicitation, costs and attorneys fees, and any other relief deemed just and equitable. Counts II and III of the complaint asserted state law claims.

On the day Reschini commenced suit, Reschini also filed a motion for a temporary restraining order. The next day, January 26, 1994, the district court, after a brief hearing, entered an order dismissing plaintiff's complaint for lack of subject-matter jurisdiction. On February 10, 1994, a special meeting of Association members was held, and the conversion plan was approved by the members.

Reschini filed a notice of appeal from the order of the district court on February 24, 1994. Oral argument in this court took place on July 12, 1994. At the time of oral argument, the proposed conversion was pending before the OTS but had not yet been approved. On October 18, 1994, the Director of the OTS approved the Association's application for conversion; the same day the Association completed its conversion to a Pennsylvania-chartered mutual savings bank.² 

On November 17, 1994, Reschini filed in this court a petition to modify, terminate, or set aside the order of the OTS Director approving the proposed conversion.³  We are, however, at pains to point out that the petition for review--an invocation of this court's appellate authority with respect to certain decisions of the OTS Director--has not yet been briefed and argued and is not the subject of this opinion; in this opinion, and our concomitant ruling, we address only the decision of the district court dismissing Reschini's suit against the Association and France.

II

As a preliminary matter, we address the contention of the Association and France that this appeal is moot because the special meeting that Reschini sought to enjoin has already occurred and the Association has already converted to a Pennsylvania-chartered savings bank.

" [I]f an event occurs while a case is pending on appeal that makes it impossible for the court to grant 'any effectual relief whatever' to a prevailing party, the appeal must be dismissed." Church of Scientology of California v. United States, --- U.S. ----, ----, 113 S. Ct. 447, 449, 121 L. Ed. 2d 313 (1992) (quoting Mills v. Green, 159 U.S. 651, 653, 16 S. Ct. 132, 133, 40 L. Ed. 293 (1895)). However, "when a court can fashion 'some form of meaningful relief,' even if it only partially redresses the grievances of the prevailing party, the appeal is not moot." Isidor Paiewonsky Assocs., Inc. v. Sharp Properties, Inc., 998 F.2d 145, 151 (3d Cir. 1993) (quoting Church of Scientology, --- U.S. at ----, 113 S. Ct. at 450). Such relief need not have been requested in the pleadings. Rather, "it is the court's obligation to grant the relief to which the prevailing party is entitled whether it has been specifically demanded or not." Kirby v. United States Dep't of Housing & Urban Dev., 745 F.2d 204, 207 (3d Cir. 1984).

If we were to find that the district court improperly dismissed Reschini's complaint and if, upon remand, Reschini were to prevail on his claim, it would then be the district court's responsibility to fashion an appropriate decree. In so doing, the district court would have the authority to deploy a full range of equitable remedies including--if deemed feasible and appropriate--a requirement that the Association and France take steps to reverse the conversion. Cf. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 386, 90 S. Ct. 616, 622, 24 L. Ed. 2d 593 (1970) (where a merger is obtained through fraudulent proxy statements, " [p]ossible forms of relief will include setting aside the merger or granting other equitable relief"); Edelman v. Salomon, 559 F. Supp. 1178, 1184 (D. Del. 1983) (stating that "a decree nullifying the corporate action taken on the basis of management's proxies" is a traditional form of relief in suits alleging fraudulent proxy materials). While it is conceivable that the district court might eventually determine that setting aside the conversion would entail undoing what cannot equitably be undone, such a determination would depend upon a fact-specific analysis of the circumstances--an analysis which we are not now in the position to perform.

Because setting aside the conversion remains a possible remedy should Reschini prevail on his claim, Reschini's appeal is not moot.⁴ 

III

Savings association conversions are governed by 12 U.S.C. § 1464(i), codifying Sec. 5(i) of HOLA. Section 1464(i) (3) sets forth criteria governing conversions of federally-chartered savings associations to state-chartered form (federal-to-state conversions). According to these criteria, a federal-to-state conversion may only be performed "upon the vote in favor of such conversion cast in person or by proxy at a special meeting of members or stockholders called to consider such action," pursuant to

the law of the State in which the home office of the Federal savings association is located, as required by such law for a State-chartered institution to convert itself into a Federal savings association, but in no event upon a vote of less than 51 percent of all the votes cast at such meeting....

12 U.S.C. § 1464(i) (3).

Section 1464(i) (2) (B) establishes a mechanism for judicial review in courts of appeals of orders of the OTS Director authorizing or barring proposed conversions. Specifically, Sec. 1464(i) (2) (B) states that " [a]ny aggrieved person may obtain review of a final action of the Director [of the OTS] which approves or disapproves a plan of conversion pursuant to this subsection only by complying with the provisions of section 1467a(j)." Section 1467a(j) provides in turn for review in courts of appeals.⁵ 

Appellees contend that Secs. 1464(i) (2) (B) and 1467a(j), creating an exclusive review mechanism for review of final decisions by the Director of the OTS which approve or disapprove plans of conversion pursuant to "this subsection," Sec. 1464(i) (2) (B), bar district court subject-matter jurisdiction over Reschini's suit. The district court accepted this reasoning, and accordingly dismissed Reschini's claims.⁶ 

On appeal, Reschini disputes this conclusion for two reasons. First, Reschini claims that the term "this subsection," as employed in Sec. 1464(i) (2) (B)'s review provisions, refers only to conversions governed by Sec. 1464(i) (2),⁷  and thus does not cover federal-to-state conversions, which are governed by Sec. 1464(i) (3).⁸  The Association and France contend, however, that the term "this subsection" refers to Sec. 1464(i) as a whole, not just to Sec. 1464(i) (2), and that the federal-to-state conversions governed by Sec. 1464(i) (3) therefore fall within the scope of Sec. 1464(i) (2) (B)'s review provisions. Second, Reschini claims that even if Sec. 1464(i) (2) (B)'s review provisions do apply to federal-to-state conversions, challenges in district court to the accuracy of proxy materials are not barred because such challenges do not seek review of "a final action of the Director [of the OTS] which approves or disapproves a plan of conversion." 12 U.S.C. § 1464(i) (2) (B). We examine the second of these two claims first.

The question whether a suit challenging the accuracy of proxy materials submitted in respect of a savings association conversion constitutes a challenge to OTS action was considered by the Seventh Circuit in Ordower v. Office of Thrift Supervision, 999 F.2d 1183 (7th Cir. 1993). Ordower concerned a federal savings association which gained approval both from the OTS and from its depositor-members to change from mutual status to stock status. Following the conversion, two depositors commenced two contemporaneous actions. One was a suit in a federal district court in Illinois which alleged that the association had utilized misleading proxy statements in seeking association members' approval of the conversion; the district court dismissed the suit for lack of subject-matter jurisdiction. The other was a petition for review filed in the Seventh Circuit challenging, on numerous grounds, the OTS Director's approval of the conversion. The Seventh Circuit consolidated the appeal from the district court and the petition for review, disposing of both in one opinion. The court found no fault in the order of the OTS Director; but the court held that the district court had jurisdiction to entertain the challenge to the proxy materials, and accordingly remanded that lawsuit for further proceedings.

In examining whether the district court had subject-matter jurisdiction over the depositors' suit alleging the fraudulent use of proxy materials, the Ordower court made a distinction between challenges to the accuracy of proxy materials and challenges to the substance of a conversion plan. With respect to challenges to the substance of a conversion plan, the court confirmed that Sec. 1464(i) (2) (B) places exclusive jurisdiction in courts of appeals. "When Congress places review of an administrative decision in the court of appeals, district judges may not enjoin or penalize action that the agency has approved or that is the natural outcome of the agency's decision." Ordower, 999 F.2d at 1188 (citing FCC v. ITT World Communications, Inc., 466 U.S. 463, 104 S. Ct. 1936, 80 L. Ed. 2d 480 (1984) and Whitney Nat'l Bank v. Bank of New Orleans & Trust Co., 379 U.S. 411, 85 S. Ct. 551, 13 L. Ed. 2d 386 (1965)). In contrast, because the OTS does not make a finding with respect to the accuracy of proxy materials, challenges to such materials could be entertained in the district court.⁹ 

We find that in the context of the Association's proposed federal-to-state conversion, as in the context of the mutual-to-stock conversion considered by Ordower, a suit challenging the accuracy of proxy materials does not seek to "enjoin or penalize action that the agency has approved or that is the natural outcome of the agency's decision." Ordower, 999 F.2d at 1188. OTS approval of the Association's application was governed by the expedited treatment process set forth in 59 Fed.Reg. 44,625 (Aug. 30, 1994) (to be codified at 12 C.F.R. Sec. 563.22(b) (1) (ii)) and 12 C.F.R. Sec. 516.3(a).¹⁰  According to the expedited treatment process, "a savings association ... may engage in activities upon filing a notice with the OTS together with any necessary certifications. For these activities, a notice will be all that is required and an association may engage in the activity unless the OTS objects within 30 days." 12 C.F.R. Sec. 516.3(a) (2) (1994). The regulations elaborating upon the necessary "notification" state that " [t]he notification may be in the form of either a letter describing the material features of the transaction or a copy of a filing made with another Federal or state regulatory agency seeking approval from that agency for the transaction...." 59 Fed.Reg. 44,626 (Aug. 30, 1994) (to be codified at 12 C.F.R. Sec. 563.22(h) (1)).

There is no indication that findings with respect to the accuracy of proxy materials are part of the expedited treatment process. Rather, as in the mutual-to-stock context considered in Ordower, the regulations which governed approval of the Association's federal-to-state conversion address the substance of the conversion plan, but not the process by which that plan is approved by the depositor-members. Accordingly, we conclude that HOLA's provision for court of appeals review of any final OTS action that "approves or disapproves a plan of conversion," 12 U.S.C. § 1464(i) (2) (B), does not, of its own force, bar district court jurisdiction over allegations of materially false or misleading proxy materials.¹¹ 

Because we find that Sec. 1464(i) (2) (B)'s court of appeals review provisions, assuming they govern federal-to-state conversions, do not bar subject-matter jurisdiction in the district court over Reschini's claims, we do not reach Reschini's alternative contention--that is, that conversions governed by Sec. 1464(i) (3) fall outside the scope of Sec. 1464(i) (2) (B)'s review provisions.¹² 

In short, if count I of Reschini's complaint--alleging that the Association and France distributed a proxy statement that was both false and incomplete--states a cognizable federal claim, the district court had subject-matter jurisdiction to entertain that claim. To the question whether count I states a cognizable federal claim we now turn.

IV

Arguing in the alternative, the Association and France contended in the district court that, even if the district court had jurisdiction to entertain Reschini's suit, the suit should nevertheless be dismissed because no implied private cause of action exists under 12 C.F.R. Sec. 569.4, the OTS regulation invoked by Reschini in count I of his complaint as the source of his asserted federal claim. Because the district court found that it lacked subject-matter jurisdiction over Reschini's suit, the district court had no occasion to consider this alternative contention. As appellees, the Association and France have renewed this contention here. Having determined that the district court, as a matter of subject-matter jurisdiction, is not precluded from entertaining Reschini's suit, we could remand to the district court the question whether HOLA contemplates such a suit. But remand would, in all likelihood, result in a subsequent appeal again presenting the same question. Because the question is one of law, considerations of judicial economy lead us to address the issue now.

Reschini bases his claim on 12 C.F.R. Sec. 569.4 (hereafter "Section 569.4" or "Sec. 569.4"), which provides as follows:

No solicitation of a proxy shall be made by means of any statement, form of proxy, notice of meeting, or other communication, written or oral, which ...

(c) (1) Contains any statement that is false or misleading with respect to any material fact, or

(2) Omits to state any material fact:

(i) Necessary in order to make the statements therein not false or misleading or

(ii) Necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter that has subsequently become false or misleading.

Section 569.4 was one of a number of regulations issued by the OTS in 1989, the year in which Congress, through the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), abolished the Federal Home Loan Bank Board (FHLBB) and created the OTS, both to take the place of the FHLBB and to carry on other regulatory functions.¹³  Section 569.4 had originally been promulgated by the FHLBB in 1971 pursuant to the FHLBB's general regulatory authority under the National Housing Act and had applied to savings institutions insured by the Federal Savings and Loan Insurance Corporation (FSLIC).¹⁴  In 1989, the OTS repromulgated Sec. 569.4 pursuant to its general regulatory authority under HOLA; as repromulgated, Sec. 569.4 applies to all savings associations.¹⁵ 

The language of Sec. 569.4 closely tracks that of SEC Rule 14a-9, 17 C.F.R. Sec. 240.14a-9,¹⁶  issued pursuant to section 14(a) of the Securities Exchange Act of 1934 (hereafter "The 1934 Act"), 15 U.S.C. § 78n(a).¹⁷  Rule 14a-9, taken together with its statutory parent, was found by the Court in J.I. Case Co. v. Borak, 377 U.S. 426, 84 S. Ct. 1555, 12 L. Ed. 2d 423 (1964), to support a private cause of action for materially misleading proxy statements.

* Borak was decided in 1964. It is still good law as a construction of the 1934 Act and Rule 14a-9. However, it is not clear that Borak, if it arose for the first time today, would be decided the same way. See Touche Ross & Co. v. Redington, 442 U.S. 560, 578, 99 S. Ct. 2479, 2490, 61 L. Ed. 2d 82 (1979) (" [S]ince Borak we have adhered to a stricter standard for the implication of private causes of action...."). Starting in 1974, in Cort v. Ash, 422 U.S. 66, 95 S. Ct. 2080, 45 L. Ed. 2d 26 (1975), the Court has in a series of decisions developed the governing law on the implication, within the interstices of federal statutes and regulations, of private causes of action. Cort v. Ash directed courts to consider four factors--whether (1) "the plaintiff [is] 'one of the class for whose especial benefit the statute was enacted' "; (2) "there [is] any indication of legislative intent ... to create such a remedy or to deny one"; (3) "it [is] consistent with the underlying purposes of the legislative scheme to imply such a remedy"; and (4) "the cause of action [is] one traditionally relegated to state law." Cort, 422 U.S. at 78, 95 S. Ct. at 2087 (citations omitted). However, as the Court observed in Touche Ross, "the [Cort ] Court did not decide that each of these factors is entitled to equal weight. The central inquiry remains whether Congress intended to create, either expressly or by implication, a private cause of action." Touche Ross, 442 U.S. at 575, 99 S. Ct. at 2488. See also Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1102, 111 S. Ct. 2749, 2763, 115 L. Ed. 2d 929 (1991) ("The rule that has emerged in the years since Borak and Mills came down is that recognition of any private right of action for violating a federal statute must ultimately rest on congressional intent to provide a private remedy.") (citing Touche Ross, 442 U.S. at 560, 99 S. Ct. at 2479).

In light of developments since Borak, the question whether a private cause of action for depositor-members of mutual savings associations is implied under Sec. 569.4's proxy provisions must begin with an examination of congressional intent.

Reschini has not identified any provision of HOLA or the National Housing Act that indicates congressional intent "to create, either expressly or by implication," a private cause of action. Our own examination has been no more fruitful. In particular, we find nothing in the provisions constituting the statutory footing for Sec. 569.4 that is supportive of a private cause of action.¹⁸ 

Reschini contends, however, that Sec. 569.4 is a regulatory embodiment of a "specific congressional intent," Brief of Roger R. Reschini, Appellant, at 8 n. 7, located not in HOLA or the National Housing Act, but in 1974 amendments to the Securities Exchange Act of 1934. Specifically, Reschini asserts that language added to Sec. 12(i) in 1974 requires the implication of a private cause of action under Sec. 569.4's proxy provisions.

Section 12(i)--a 1964 addition to the 1934 Act--authorizes certain non-SEC agencies to administer the 1934 Act's provisions with respect to securities issued by institutions over which these agencies have regulatory authority.¹⁹  As originally adopted, Sec. 12(i) did not grant any regulatory authority to the FHLBB. Congress remedied this omission in 1974, however, providing regulatory authority to the FHLBB over securities issued by institutions whose accounts were insured by the FSLIC. Pub. L. No. 93-495, Sec. 105(b), 88 Stat. 1500, 1503-04 (1974), codified at 15 U.S.C. § 78l (i). Section Sec. 12(i) was again amended in 1989 via FIRREA; in the amended version, the OTS was substituted for the FHLBB and was given regulatory authority with respect to securities issued by institutions whose accounts are insured by the Federal Deposit Insurance Corporation. See 15 U.S.C. § 78l (Historical and Statutory Notes, 1989 Amendment).

The 1974 amendment to Sec. 12(i), in addition to its grant of regulatory authority to the FHLBB, added language directing the non-SEC agencies to issue regulations "substantially similar" to those promulgated by the SEC pursuant to numerous sections of the 1934 Act, including the proxy provisions of Sec. 14(a):

In carrying out their responsibilities under this subsection, the agencies named ... shall issue substantially similar regulations to regulations and rules issued by the [SEC] under sections 12, 13, 14(a), 14(c), 14(d), 14(f) and 16 [of the 1934 Act], unless they find that implementation of substantially similar regulations with respect to insured banks and insured institutions [is] not necessary or appropriate in the public interest or for protection of investors, and publish such findings, and the detailed reasons therefor, in the Federal Register.

Pub. L. No. 93-495, Sec. 105(b), 88 Stat. 1500, 1503-04 (1974), codified at 15 U.S.C. § 78l (i). For the reasons that follow, we disagree with Reschini's contention that Sec. 12(i)'s "substantially similar" language provides the requisite congressional intent to create a private cause of action under Sec. 569.4 for depositor-members of mutual savings associations.

First, while Reschini's argument for a private cause of action under OTS proxy regulations may have merit insofar as it applies to proxy regulations issued pursuant to Sec. 12(i)'s mandate,²⁰  Sec. 569.4 is not such a regulation. As described above, Sec. 569.4 was originally adopted in 1971 pursuant to the general FHLBB's general regulatory authority under the National Housing Act--three years before Sec. 12(i) was amended to give the FHLBB authority to administer the 1934 Act's securities provisions. When Sec. 569.4 was promulgated anew by the OTS in 1989, the OTS cited its general regulatory authority under HOLA. On neither occasion was Sec. 12(i) of the 1934 Act mentioned as authority for the regulation.

Second, the 1934 Securities Exchange Act provisions are simply not relevant to the ownership interests held by Reschini. The 1934 Act establishes a statutory scheme covering certain types of securities. Originally, the 1934 Act applied only to securities traded on national securities exchanges; in 1964, Congress passed the Securities Act Amendments which extended the 1934 Act's protections and requirements to include many over-the-counter securities as well. See S.Rep. No. 379, 88th Cong., 1st Sess. 1 (1963) (a "primary objective" of the 1964 amendments is to "improve investor protection by extending to the larger companies in the over-the-counter market the registration, reporting, proxy solicitation, and insider trading requirements now applicable to companies listed on an exchange").²¹ 

Reschini's ownership interest, however, is not among those types of securities covered by the 1934 Act's protections, even as expanded in 1964. When, in 1964, Congress extended the 1934 Act's protections to certain over-the-counter securities, it specifically excluded from coverage "any security, other than permanent stock, guaranty stock, permanent reserve stock, or any similar certificate evidencing nonwithdrawable capital, issued by a savings and loan association." 15 U.S.C. 78l (g) (2) (C). Given that Sec. 12(i) directs regulatory agencies to issue "substantially similar" regulations to those of the SEC in the context of "carrying out their responsibilities under this subsection," it would be anomalous to find that this language evidences congressional intent to create a private cause of action with respect to ownership interests outside the 1934 Act's protections.²² 

Because Sec. 569.4 was not promulgated pursuant to Sec. 12(i) of the 1934 Act, and because the 1934 Act does not even apply to the ownership interests of depositor-members in mutual savings associations, we find no evidence in Sec. 12(i) of congressional intent to create a private cause of action for depositor-members of mutual savings associations under Sec. 569.4.

B

In the preceding section of this opinion we have addressed, as the touchstone issue, the question of congressional intent to establish a private cause of action. But there is a further issue to be addressed. Bearing in mind that--as in Borak--certain private causes of action were judicially implied in the pre-Cort era when congressional intent was "not ... the considered focus," Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1102, 111 S. Ct. 2749, 2763, 115 L. Ed. 2d 929 (1991), the question arises whether the non-implication of a private cause of action would be "demonstrably inequitable to a class of would-be plaintiffs with claims comparable to those previously recognized," id. at 1104, 111 S. Ct. at 2764.

[W]here a legal structure of private statutory rights has developed without clear indications of congressional intent, the contours of that structure need not be frozen absolutely when the result would be demonstrably inequitable to a class of would-be plaintiffs with claims comparable to those previously recognized. Faced in that case with such a claim for equality in rounding out the scope of any implied private statutory right of action, we [look] to policy reasons for deciding where the outer limits of the right should lie.

Id. at 1104-05, 111 S. Ct. at 2764 (discussing Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S. Ct. 1917, 44 L. Ed. 2d 539 (1975)).

The "previously recognized" cause of action to which Reschini's claim might be compared is that implied by the Borak Court under SEC Rule 14a-9. Reschini's claim, like the claim at issue in Borak, involves an allegation of materially misleading proxy statements. Unlike the proxy statements in Borak, however, the proxy statements of which Reschini complains are not subject to the proxy disclosure provisions of the 1934 Act. As discussed above, securities issued by savings associations--with the exception of certain types of securities not relevant here--are expressly excluded from coverage of the Act's requirements and protections. 15 U.S.C. § 78l (g) (2) (C).

We find this difference to be significant. When Congress exempted accounts in savings and loan associations from the 1934 Act's requirements, it did so on the basis of an important distinction between such accounts and other types of securities: the lack of a trading interest. See S.Rep. 379, 88th Cong., 1st Sess. at 61 (1963) (explaining the exemption for "share accounts in savings and loan associations" on the basis that " [t]here is normally no trading interest in ... [this category] of securities"). The Ordower court also discussed the insubstantial nature of the ownership interests held by depositor-members of a mutual savings association.²³  These characteristics lead us to conclude that Reschini's ownership interest in his savings account is not sufficiently comparable to the interests of persons with claims under SEC Rule 14a-9 such that the failure to recognize a private cause of action would be "demonstrably inequitable."²⁴ 

C

Our analysis has revealed no evidence of congressional intent to create a private cause of action under Sec. 569.4 for depositor-members of mutual savings associations. Moreover, we are not persuaded that non-implication of a private cause of action would create a situation "demonstrably inequitable" to such depositor-members. Thus, we conclude that count I of Reschini's complaint does not state a federal claim on which relief can be granted.

V

Accordingly, albeit because of the absence of a cognizable federal cause of action rather than for lack of subject-matter jurisdiction, the judgment of the district court dismissing Reschini's complaint will be affirmed.