Gustafson v. Alloyd Co., 513 U.S. 561, 14 (1995)

Page:   Index   Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

574

GUSTAFSON v. ALLOYD CO.

Opinion of the Court

communication, written or by radio or television, which offers any security for sale or confirms the sale of any security." 15 U. S. C. § 77b(10). Concentrating on the word "communication," Alloyd argues that any written communication that offers a security for sale is a "prospectus." Inserting its definition into § 12(2), Alloyd insists that a material misstatement in any communication offering a security for sale gives rise to an action for rescission, without proof of fraud by the seller or reliance by the purchaser. In Alloyd's view, § 2(10) gives the term "prospectus" a capacious definition that, although incompatible with § 10, nevertheless governs in § 12.

The flaw in Alloyd's argument, echoed in the dissenting opinions, post, at 587 (opinion of Thomas, J.); post, at 597 (opinion of Ginsburg, J.), is its reliance on one word of the definitional section in isolation. To be sure, § 2(10) defines a prospectus as, inter alia, a "communication, written or by radio or television, which offers any security for sale or confirms the sale of any security." 15 U. S. C. § 77b(10). The word "communication," however, on which Alloyd's entire argument rests, is but one word in a list, a word Alloyd reads altogether out of context.

The relevant phrase in the definitional part of the statute must be read in its entirety, a reading which yields the interpretation that the term "prospectus" refers to a document soliciting the public to acquire securities. We find that definition controlling. Alloyd's argument that the phrase "communication, written or by radio or television," transforms any written communication offering a security for sale into a prospectus cannot consist with at least two rather sensible rules of statutory construction. First, the Court will avoid a reading which renders some words altogether redundant. See United States v. Menasche, 348 U. S. 528, 538-539 (1955). If "communication" included every written communication, it would render "notice, circular, advertisement, [and] letter" redundant, since each of these are forms of writ-

Page:   Index   Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: October 4, 2007