An early case on the Supreme Court's calendar this fall is Stoneridge v. Scientific Atlanta.
Extensive background is provided in Peter Lattman's extensive coverage on the Wall Street Journal Law Blog--a collection of his posting can be found here.
Larry Ribstein and Stephen Bainbridge have co-authored an amicus brief (with several others) and have blogged on the case. Having read some commentary on the case, Larry and Steve's arguments seem persuasive. Ribstein writes:
As a purely legal matter, I must add that the issue is not a no-brainer. The basic problem is that the implied right of action is almost completely open-ended, and facts can be manipulated endlessly in a complaint. Lerach's Enron complaint was 500 pages long. In my article with Kobayashi, Class Action Lawyers as Lawmakers, we compared such complaints to Theodore Dreiser's reconstruction of a crime in his novel, An American Tragedy.
All the more reason why we need clear rules here. My theory is that the Court took cert on the Stoneridge case to provide that clarity, and that it will add the Enron case to the appeal to increase that clarity. By doing this the Court can make sure that secondary civil liability under 10b-5 is really dead, and stays dead, rather than wandering in scheme liability form like some terrifying zombie.
Boyden Gray also had an editorial in the Financial Times a few weeks ago that picks up on some of the policy issues associated with this, especially in the context of international law. The article is subscriber's only, but I found it reprinted here.
I should add that Mayer Brown LLP, with whom Eugene is affiliated part-time, is representing the respondents in the case.