Amgen Inc. v. Connecticut Retirement Plans and Trust Funds (2012)
- Docket
- 11-1085
- Decided
- 2012-01-01
Summary
Question: 1. 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? 2. Must the district court allow Amgen, Inc. to present evidence rebutting the applicability of the fraud-upon-the-market theory before certifying the plaintiff class Conclusion: No, no. Justice Ruth Bader Ginsburg delivered the opinion of the 6-3 majority. The Supreme Court held that the issue of materiality is dealt with when the case is decided on the merits, not during class certification. For a class to be certified, the members of the class must show only that the questions they have in common predominate over questions affecting solely individual members of the class. The Supreme Court also held that the district court ruled appropriately in preventing Amgen from bringing in rebuttal evidence to prevent class certification. Such evidence dealt with material issues of the case that would be decided when the case was considered on the merits, and thus did not relate to the issue of class certification. In his concurring opinion, Justice Samuel A. Alito, Jr. wrote that, while he joins the majority's opinion, recent economic evidence suggests that the fraud-on-the-market theory might rest on faulty economic presumptions that would be worth reexamining. Justice Antonin Scalia wrote a dissenting opinion in which he argued that a presumption of materiality was necessary for class certification in a fraud-on-the-market case. Because such a case is predicated on the idea that the members of the class relied on faulty information, there cannot be a suit without evidence that the faulty information was material. In his separate dissent, Justice Clarence Thomas argued that plaintiffs seeking to use the fraud-on-the-market theory must show evidence of all aspects of the theory, including materiality, to be certified as a class. Without proof of materiality along with the other elements, there is no evidence that the claim has class-wide relevance. Justice Anthony M. Kennedy and Justice Scalia joined in the dissent.