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On Friday, the Supreme Court granted review in three consolidated cases: Chadbourne & Parke LLP v. Troice, No. 12-79, Willis of Colorado v. Troice, No. 12-86, and Proskauer Rose LLP v. Troice, No. 12-88. The Court’s decision will clarify when the federal Securities Litigation Uniform Standards Act (“SLUSA”) preempts state-law securities class actions.

After Congress tightened the pleading and proof requirements for class actions under the federal securities laws in 1996 in the Private Securities Litigation Reform Act, plaintiffs fled to state court and started bringing securities class actions under state law. In response to this evasion,…
Continue Reading Supreme Court to Decide Scope of Preemption of State-Law Securities Class Actions by SLUSA

A few months ago, I posted about a Second Circuit decision that threatens to open the floodgates to securities class actions, NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012).  In that decision, the Second Circuit ruled that even though a plaintiff in an individual action may assert securities claims only as to securities that it purchased, a plaintiff may bring a class action involving securities that it did not purchase.  According to the Second Circuit, a plaintiff has “class standing” to bring such claims if it purchased at least one of…
Continue Reading DRI Amicus Brief Argues That Second Circuit’s Expansive View Of “Class Standing” In Securities Cases Should Be Rejected

The Supreme Court recently heard oral argument in a case that may have a significant impact on how district courts resolve class certification fights in securities fraud cases. The issue in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds is whether a class can be certified if the alleged misrepresentations constituting the fraud are not “material” under the federal securities laws. In the decision below, the Ninth Circuit said yes, refusing to consider evidence that securities analysts had already reported the truth of the matters that the defendant allegedly misrepresented—rendering the alleged misrepresentation immaterial. That decision deepened a circuit…
Continue Reading Supreme Court Hears Oral Argument On Whether Materiality Must Be Proven At The Class Certification Stage In Securities Class Actions