On this previously recorded conference call, Prof. J.W. Verret discusses three interrelated dimensions of the Supreme Court case Amgen v. Connecticut, which held that shareholder class actions under the 10(b)-5 anti-fraud rule do not need to establish that alleged misstatements are material to use the fraud on the market presumption (which allows them to meet the reliance requirement in those actions) in obtaining class certification.  
 
On one level this case appeared to be a victory for the plaintiff's bar.  Since nearly all securities class actions either settle or are dismissed, a heightened pleading standard to obtain class certification could have significantly limited the settlement value of these suits.  
 
On a second dimension, some of the Justices joining the opinion signaled their willingness to abandon the fraud on the market presumption, and its underlying assumption of market efficiency, altogether.  The fraud on the market presumption assumes that all publicly available information is incorporated into stock price, and therefore essentially obviates the need for thousands of class action plaintiffs to demonstrate their reliance on particular fraudulent information and instead allows them to merely demonstrate their reliance on the stock's price.  In that sense, this opinion may portend a future and major victory for the defense bar.  
 
Yet on a third dimension, if the Court begins to relax the efficient markets assumption which underlies judicial doctrine in 10(b)-5 and the securities laws themselves, this may have unintended consequences for cost-benefit analysis in disclosure rule making by the Commission and for adjudication of other elements of 10(b)-5.

Featuring:

• Prof. J.W. Verret, George Mason University School of Law
• Moderator: Mr. Dean A. Reuter, Vice President & Director of Practice Groups, The Federalist Society

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On April 17, 2013, the Supreme Court decided Kiobel v. Royal Dutch Petroleum Co., holding that the Alien Tort Statute does not have extraterritorial reach.  This halts the recent trend of parties being hauled into United States courts for alleged torts that occurred in another country with no connection to the United States.  This teleforum discusses the implications of this landmark decision.

Featuring:

• Prof. Chimène Keitner, University of California Hastings College of the Law
• Prof. Julian G. Ku, Professor of Law and Faculty Director of International Programs, Hofstra University Maurice A. Deane School of Law
• Moderator: Mr. Dean A. Reuter, Vice President & Director of Practice Groups, The Federalist Society

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In American Express Co. v. Italian Colors Restaurant, the Supreme Court considered an important question regarding the enforceability of arbitration agreements that contain class action waivers.  In 2011, the Court held in AT&T Mobility LLC v. Concepcion that state law purporting to invalidate class action waivers in arbitration agreements is preempted by the Federal Arbitration Act.  In Italian Colors, however, which involves a Sherman Act class action brought by retailers against American Express for alleged tying violations relating to its credit card agreements, the Second Circuit held that the “federal substantive law of arbitrability” invalidated the class action waiver provision in American Express’s arbitration agreements with merchants that accept its credit cards.  The court of appeals reasoned that the class action waiver provision was invalid under federal law because it would “effectively preclude any action seeking to vindicate the statutory rights asserted by” the plaintiff class, given the prohibitive expense of trying to prove an antitrust claim on an individual basis.  The Second Circuit concluded that Concepcion was inapposite, because there had been no showing there that “the practical effect of the enforcement would be to preclude [the plaintiff class’s] ability to vindicate their statutory rights.”  The Supreme Court will now decide whether its Concepcion decision really did vindicate the ability of business defendants to enforce class action waivers in arbitration agreements, or instead whether plaintiffs can escape such provisions whenever they can show that individual litigation of federal claims would be prohibitively expensive.

Our expert, Thomas G. Hungar of Gibson, Dunn & Crutcher, attended the oral argument and then provided his analysis of the merits of the case and the possible outcomes in light of the oral arguments.

Featuring:

• Mr. Thomas G. Hungar, Partner, Gibson Dunn & Crutcher LLP
• Moderator: Mr. Dean A. Reuter, Vice President & Director of Practice Groups, The Federalist Society

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An increase in Federal executive branch regulatory activity – whether through executive order, formal or informal administrative agency action – has been noted by many across the country. In launching the Executive Branch Review Project, the Practice Groups of the Federalist Society seek to prompt a national debate about whether there has been an uptick in such regulatory activity, and, if so, with what consequence. The project will provide objective resources that identify major government activity, and will provide a forum for debate and discussion about whether such regulation constitutes a form of legal and regulatory overreach. The first component of this project is a new blog dedicated to highlighting action or inaction by the executive branch, http://www.executivebranchproject.com/.

To kickoff this new endeavor, U.S. Senator Michael S. Lee (Utah) and Federalist Society founder and Vice Chairman David M. McIntosh discussed the project and provided their perspectives on the use of executive power.

Featuring:

• Hon. Michael S. Lee, United States Senate, Utah
• Hon. David M. McIntosh, Partner, Mayer Brown LLP and Vice Chairman, The Federalist Society
• Moderator: Mr. Dean A. Reuter, Vice President & Director of Practice Groups, The Federalist Society

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