May 14, 2013
On February 27, 2013 the Supreme Court announced its decision in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds. The question in this case is twofold: (a) whether, in misrepresentation actions under SEC Rule 10-b(5), plaintiffs asserting a fraud-on-the-market theory must prove materiality before they can proceed with a class action, and (b) whether the defendants are permitted to present evidence rebutting a fraud-on-the-market theory at the class certification stage.
In an opinion delivered by Justice Ginsburg, the Court held by a vote of 6-3 that proof of materiality is not necessary for certification of a class-action that seeks damages for violations of the SEC rule; nor did the lower court err in declining to consider rebuttal evidence at the class-certification stage. Chief Justice Roberts and Justices Breyer, Alito, Sotomayor and Kagan joined the opinion. Justice Alito filed a concurring opinion. Justice Scalia filed a dissenting opinion. Justice Thomas filed a separate dissenting opinion, which was joined by Justice Kennedy and Justice Scalia in all except Part 1-B.
To discuss the case, we have Charles Korsmo, who is an Assistant Professor at Case Western Reserve University School of Law.