Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


Supreme Court’s Amgen decision makes it easier for shareholders to bring class actions

Court says shareholders can sue before proving that misinformation inflated stock price

The Supreme Court handed down a decision yesterday that experts say will have big implications for securities class action litigation.

Yesterday, the high court ruled 6-3 that shareholders of Amgen Inc. could bring a securities fraud class action against the biotechnology company without first showing that misinformation had materially and fraudulently inflated the company’s stock price. Experts say the decision will make it easier for shareholders to bring securities class actions against corporate defendants.

In the suit, Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, Amgen shareholders accused the company of misleading them between April 2004 and May 2007 by embellishing the safety of its anti-anemia drugs. The plaintiffs sought class certification based on the “fraud on the market” theory the Supreme Court endorsed in its 1988 Basic Inc. v. Levinson decision. The theory reasons that stock purchasers are presumed to rely on the truthfulness of publicly available information.

In November 2011, the 9th Circuit allowed the class action against Amgen to proceed. Amgen appealed, and various business groups supported it—including the U.S. Chamber of Commerce, which said the 9th Circuit’s decision would encourage premature class certifications, and the Securities and Exchange Commission, which said the decision would force Amgen to settle possibly frivolous claims.

Nonetheless, the Supreme Court’s decision yesterday upheld the 9th Circuit’s ruling. The court specified that though Amgen shareholders will ultimately have to prove the company’s alleged misrepresentations fraudulently inflated its stock prices, they didn’t need to do so at the outset of the litigation.

See the New York Times, Thomson Reuters and Wall Street Journal for more analysis of the Amgen decision.

Read more about trends in securities class action litigation in the April issue of InsideCounsel.

For more recent InsideCounsel coverage of Supreme Court activity, read:

Supreme Court appears to side with Monsanto in seed patent case

Supreme Court will hear law firms’ appeals in Allen Stanford case

January Supreme Court Roundup: Environmental law and the Class Action Fairness Act take center stage

Supreme Court will hear gay marriage cases in March

Ashley Post

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.