Questions Presented
Under the federal securities laws, only a person who has purchased or acquired a security may assert claims alleging that the registration statement or prospectus for that security contained false information. See 15 U.S.C. §§ 77k, 77l(a)(2). A person who has not transacted in a security lacks standing to bring suit asserting such claims. The fact”'[t]hat a suit may be a class action ... adds nothing to the question of standing.'“ Lewis v. Casey, 518 U.S. 343, 357 (1996) (citation omitted). The question presented is:
Whether the Second Circuit erred in concluding, in direct conflict with a decision from the First Circuit on the same issue, that a representative plaintiff has standing to assert on behalf of absent class members claims for relief that the representative plaintiff lacks standing to assert on its own behalf.
Case Updates
Cert. petition denied
March 18, 2013
U.S. Chamber urges Supreme Court to review Second Circuit decision that could dramatically expand securities class actions
December 03, 2012
NCLC urged the Supreme Court to review a decision by the Second Circuit which dramatically expands the claims that a named plaintiff may bring under the Securities Act on behalf of a purported class. In this case, the Second Circuit held that “class standing” permits a named plaintiff to assert claims under the Securities Act of 1933 (the “Securities Act”) on behalf of absent class members that purchased securities that the named plaintiff did not itself purchase as long as the claims “implicate[] the same set of concerns” or “raise a sufficiently similar set of concerns.”
NCLC argued in its amicus brief that the Second Circuit's decision conflicts with the approach to standing taken by other courts of appeals in Securities Act litigation. Additionally, NCLC argued that the Second Circuit's decision is inconsistent with the structure and operation of the Securities Act because sections 11 and 12 of the Act confer standing only on actual purchasers of the specific security sold. NCLC warned that the Second Circuit's approach will significantly increase the scope of potential Securities Act liability, will coerce settlements of claims plaintiffs do not have standing to pursue and creates a standard that will be difficult for lower courts to apply consistently.