- Court: U.S. Supreme Court Certiorari Granted
- Area(s) of Law: Civil Procedure
- Date Filed: November 15, 2013
- Case #: 13-317
- Judge(s)/Court Below: Court Below: 718 F.3d 423 (5th Cir. 2013)
- Full Text Opinion
Respondent alleged that Petitioner made fraudulent misrepresentations which artificially inflated the price of Petitioner's stock. Respondent attempted to certify a class of people who purchased Petitioner's stocks. Respondent alleges material losses due to Petitioner's misrepresentations.
The lower court determined that Respondent satisfied the numerosity, commonality, typicality and adequacy of representations factors to qualify as a class. However, the court declined to certify the class because Respondent failed to establish loss causation. The Fifth Circuit affirmed. The Supreme Court remanded and held that proof of loss causation was not required for class certification. On remand, the Fifth Circuit again affirmed the lower court relying on Basic Inc. v. Levinson which adopts a legal presumption that a purchaser of stock at market price will be presumed to have relied upon certain representations. Petitioner appealed.
The Supreme Court granted certiorari to determine (1) whether the holding in Basic Inc. v. Levinson should be overruled or modified and (2) whether class certification may be rebutted by providing evidence that the misrepresentations did not distort the actual stock value.