## Facts

- A putative class of equity options purchasers sued multiple national securities exchanges and certain market-making firms, alleging a concerted effort to limit “multiple listing” of options classes on more than one exchange.
- Equity options trading was regulated by the SEC under the Securities Exchange Act of 1934, including supervision of exchange rules affecting options listing and trading.
- In the late 1970s and early 1980s, the SEC expressed concerns about multiple trading and requested temporary pauses while it studied market structure; exchanges complied.
- The SEC later approved exchange-developed approaches that allocated new options classes for exclusive trading on a single exchange, reflecting then-current regulatory concerns about market fragmentation.
- In 1987, the SEC adopted Rule 19c-5, which prohibited exchanges from maintaining rules, policies, or practices that limited multiple listing, with phased implementation; later moratoria were lifted, and by the end of 1994 all equity options were eligible for multiple trading.
- Plaintiffs alleged that, notwithstanding the later regulatory direction favoring multiple listing, exchanges and market-makers agreed to maintain exclusive listings and otherwise restrict competition, causing wider spreads and supracompetitive pricing.
- Defendants moved to dismiss, arguing that the Exchange Act and SEC oversight implicitly displaced Sherman Act § 1 for the challenged conduct; the district court dismissed on implied-repeal grounds.

## Issues

1. Whether the Securities Exchange Act of 1934 and SEC regulation of options listing impliedly repeal Sherman Act § 1 as applied to an alleged agreement among exchanges and market-makers to restrict multiple listing.
2. Whether applying antitrust law to the alleged conduct would create a “plain repugnancy” with the SEC’s authority and objectives in regulating the options markets.

## Decision

- The Second Circuit reversed the dismissal and remanded.
- The court held that Sherman Act § 1 was not impliedly repealed for the alleged conspiracy to restrict multiple listing.
- The court concluded that, on the pleadings, antitrust enforcement would not conflict with the SEC’s regulatory scheme and could proceed alongside it.

## Legal Principles

- Implied repeal of the antitrust laws is strongly disfavored and permitted only to the minimum extent necessary for the regulatory statute to function.
- The governing inquiry is whether there is a “plain repugnancy” or irreconcilable conflict between antitrust enforcement and the regulatory framework.
- The existence of comprehensive SEC regulation does not alone confer antitrust immunity; the regulator must have authorized, required, or made necessary the specific conduct alleged, such that antitrust liability would obstruct the regulatory program.
- SEC-approved coordination or temporary restraints undertaken at the SEC’s direction do not automatically immunize broader private agreements that exceed what the SEC required or permitted.
- Courts may manage potential regulatory/antitrust tension case-by-case (including considering the agency’s views), rather than categorically barring suits at the pleading stage.

## Conclusion

The Second Circuit held that the securities laws did not impliedly displace Sherman Act scrutiny of an alleged agreement to restrict multiple listing of equity options because antitrust enforcement was not plainly inconsistent with the SEC’s authority or objectives, and the case was allowed to proceed on remand.


Miller v. Am. Stock Exch., 317 F.3d 134 (2d Cir. 2003)