When the U.S. Supreme Court’s current term opened in October, things looked bleak for the class action. Three major cases were on the court’s docket, and each seemed handpicked as a vehicle for the court’s conservatives to curb the availability of the class action. Now, barely six months later, it is clear that this assault has fallen short. The high water mark in this hostile tide was probably reached in 2011 when the court decided both Wal-Mart Stores v. Dukes1 and AT&T Mobility v. Concepcion.2 In these cases, the court both tightened the standards for class certification and opened the doors for the widespread use of boilerplate arbitration clauses in consumer contracts. Then, in 2013, in Comcast v. Behrend,3 the court wrote a more ambiguous decision that threatened to require that damages in a class action be established on a class-wide basis (thereby barring class certification in cases in which individualized damage determinations would be necessary). Lower courts (including the redoubtable Judge Richard Posner) resisted this change, and Comcast was susceptible to narrower readings. But at least one of the cases before the court this term seemed to provide an opportunity for the court to more strictly enforce its earlier statements about the need for a common damages model.
Still, before the court received that opportunity to reconsider Comcast, the tide shifted in other areas. In 2014, in Halliburton v. Erica P. John Fund4 (Halliburton II), the court reaffirmed the “fraud on the market” doctrine, thereby permitting securities class actions to continue pretty much as before. Stare decisis won out over a concerted attack from the financial industry and conservative activists. A year later, in Omnicare v. Laborers Dist. Council Constr. Indus. Pension Fund,5 the court actually liberalized the standards for liability in connection with statements of opinion. Although the decision was limited to §11 of the Securities Act of 1933, it seems likely to leak over into Rule 10b-5 litigation as well.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
