Stock fraud class actions
Amgen v. Connecticut Retirement Plans and Trust Funds
In brief
The investors could sue together without first proving Amgen’s alleged statements were important to investors, and the Supreme Court agreed with the Ninth Circuit.
- Where it stands
- Decided
Decided 6-3 · February 27, 2013 · Opinion by Justice Ginsburg
- What it’s about
- Connecticut Retirement Plans & Trust Funds brought a securities-fraud class action against Amgen, which argued that investors had to prove the alleged misstatements were important to investors before the case could proceed as a group.
- Who it affects
- For damages class actions alleging violations of Section 10(b) and Rule 10b-5, courts need not require proof that alleged statements mattered to investors before allowing the group to proceed.
Summary: written with AI from the case record.
What it's about
The Supreme Court agreed with the Ninth Circuit that such proof was not required and affirmed its ruling.
Connecticut Retirement Plans & Trust Funds brought a securities-fraud lawsuit against Amgen. Amgen argued that investors first had to show its alleged statements were important to investors before they could sue together.
The case addressed when investors can bring claims together, not whether Amgen ultimately committed securities fraud.
Question presented
Must the district court require proof of materiality before certifying a class action based on the fraud-upon-the-market theory in a misrepresentation case?
What the Court decided
Holding
Proof of materiality is not a prerequisite to certification of a secu-rities-fraud class action seeking money damages for alleged violations of §10(b) and Rule 10b–5. 660 F. 3d 1170, affirmed.
- Result
- Affirmed
The Court's reasoning
The Court said whether the alleged statements were important to investors is a question for resolving the fraud claims, not a requirement for allowing investors to sue as a group.
The vote
From the opinions
“Today’s Court applies to that rule the principles of Federal Rule of Civil Procedure 23(b)(3), and thereby concludes (logically enough) that commonality is established at the certification stage even when materiality has not been shown.”
What's next
The lawsuit proceeds on the underlying fraud claims. Whether the alleged statements were important to investors remains to be decided when those claims are resolved.
Documents
Opinions
Audio
Docket activity
New analysis added
AI analysis generated: Case Briefing
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AI analysis generated: Impact Analysis
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AI analysis generated: Decision Record
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Audio Recording added: Oral Arguments - Amgen Inc. v. Connecticut Retirement Plans and Trust Funds
Opinion added: Amgen
More questions
- Did the Court revisit the market-reliance presumption (the rule that market purchases can show investor reliance)?
- No. Justice Alito said Amgen had not asked the Court to revisit that rule, though he said reconsideration might be appropriate.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.