Champagne Popping Over Stoneridge Ruling
Conde Nast Portfolio's story on the Supreme Court's decision in Stoneridge Investment Partners v. Scientific-Atlanta points out that the Court's majority opinion was influenced by an amicus brief based on the scholarship of Professor Joseph A. Grundfest, namely his paper Scheme Liability: A Question for Congress, not the Court. Karen Donovan reports:
Just how thrilled are corporate lawyers over the Supreme Court's decision yesterday to rein in shareholder class actions, declaring that investors cannot sue third-party businesses for their participation in a "scheme" with a public company to inflate its stock price?
Word from lawyers who are studying the opinion, considered the most important business case on the Supreme Court's docket this term, is that Justice Anthony M. Kennedy, author of the majority opinion in Stoneridge, took a page, quite literally, from an amicus brief filed by a number of law professors and former commissioners of the Securities and Exchange Commission.
Among the sea of amici, this brief is one that relies heavily on the scholarship of Joseph A. Grundfest, a professor at Stanford Law School, former S.E.C. commissioner and consultant to corporate America. In August, Grundfest published a paper called "Scheme Liability: A Question for Congress, not the Court."
And in fact, that is just what Kennedy wrote: "The decision to extend the cause of action is for Congress, not for us," according to the majority opinion. And, at least in Kennedy's view, Congress has already asked and answered the question of whether third parties should be liable.