The Supreme Court Holds That Class Certification of Rule 10b-5 Claims Does Not Require Proof of Materiality
Yesterday, in Amgen Inc., et al. v. Connecticut Retirement Plans, the Supreme Court held that a plaintiff class bringing suit under SEC Rule 10b-5 and relying on the fraud-on-the-market theory need not prove at the class certification stage that a defendant’s alleged misrepresentations were material. Requiring a plaintiff to prove materiality at the class certification stage “would have us put the cart before the horse,” wrote Justice Ginsburg for the 6-3 majority. Under Rule 23(b)(3), a plaintiff seeking class certification is required to show only that common questions predominate among the class such that plaintiffs’ claims stand or fall together—not that questions will be resolved on the merits in favor of the class. The decision resolved a split among the circuits.