case 15-3179, document 19-1, 10/15/2015, 1620578, page1 of...

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Thurgood Marshall U.S. Courthouse 40 Foley Square, New York, NY 10007 Telephone: 212-857-8500

MOTION INFORMATION STATEMENT

Docket Number(s): 15-3179 -----------------------------------Motion ror: Leave To File Brief as Amici Curiae

Set fo rth below precise, complete statement of rel ief sought:

Movants seek leave to file an amici curiae brief in

support of defendants-petitioners and the petition

for leave to appeal.

Amici Curiae Cosenza, Grundfest, Lorne, MOVINRARTY: Mahoney, Painter, Scott, and Vollmer

UPlainti ff Defendant D Appellant/Petitioner Appellee/Respondent

MOVING ATTORNEY: George T. Conway Ill

Caption [use short title]

In re Goldman Sachs Group, Inc. Securities Litigation

Plaintiffs-Respondents Arkansas OPPOSING PARTY: Teachers Retirement System et al.

OPPOSING ATTORNEY: Thomas A. DubbS [name of attorney, with firm, address, phone number and e-mail]

Wachtel!, Lipton, Rosen & Katz Labaton Sucharow LLP

51 West 52nd St., New York, NY 1001 9 140 Broadway, 34th Floor, New York, NY 10005

(212) 403-1000; [email protected] (212) 907-0700; [email protected]

Han. Paul A Crotty, United States District Court for the Southern District of New York Court-Judge/ Agency appealed from: --------------------------------------------------------------------------

Please check appropriate boxes:

Has movant notified opposing counsel (requ ired by Local Rule 27.1): [{] YesO No (explain): ________________________ _

Opposin~unsel ' s position on motion: L{J Unopposed OOpposed Qon't Know See below.

Does opposing counsel intend to fil e a response:

D Yes []No [{]oon 't Know

Defendants-petitioners have consented to this motion; plaintiffs-respondents state that they take no position.

FOR EMERGENCY MOTIONS, MOTIONS FOR STAYS AND INJUNCTIONS PENDING APPEAL: Has request for relief been made below? Has this relief been previously sought in this Court?

DYes D Na

DYes 0 No Requested return date and explanation of emergency: ______________ __

Is oral argument on motion requested? D Yes [{]No (requests for oral argument will not necessarily be granted)

Has argument date of appeal been set? D Yes [{] No If yes, enter date: __________________________________________ _

Service by: [{] CM/ECF D Other [Attach proof of service]

Form T-1080 (rev. 12-13)

Case 15-3179, Document 19-1, 10/15/2015, 1620578, Page1 of 5

15-3179 IN THE

United States Court of Appeals FOR THE SECOND CIRCUIT

__________

IN RE GOLDMAN SACHS GROUP, INC. SECURITIES LITIGATION

__________

ON PETITION FOR PERMISSION TO APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF NEW YORK

MOTION OF FORMER SEC OFFICIALS AND LAW PROFESSORS FOR LEAVE TO FILE BRIEF AS

AMICI CURIAE IN SUPPORT OF PETITION FOR PERMISSION TO APPEAL

GEORGE T. CONWAY III CHARLES D. CORDING WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, New York 10019 (212) 403-1000

Attorneys for Amici Curiae

October 15, 2015


Elizabeth Cosenza, Joseph A. Grundfest, Simon M. Lorne, Paul G.

Mahoney, Richard W. Painter, Kenneth E. Scott, and Andrew N. Vollmer

respectfully move under Fed. R. App. P. 29(b) for leave to file a brief as amici

curiae in support of the petition for leave to appeal in this case. A copy of the

proposed brief is an exhibit to this motion. Defendants-petitioners have consented

to this motion; plaintiffs-respondents take no position on it.

Amici curiae are a group consisting of former officials of the United States

Securities and Exchange Commission, and law professors whose scholarship and

teaching focuses on the federal securities laws. In alphabetical order, amici curiae

are:

Ø Elizabeth Cosenza, who is Associate Professor and Area Chair, Law

and Ethics, at Fordham University;

Ø The Honorable Joseph A. Grundfest, who is the William A. Franke

Professor of Law and Business at Stanford Law School, and served as

a Commissioner of the SEC from 1985 to 1990;

Ø Simon M. Lorne, who served as General Counsel of the SEC from

1993 to 1996;

Ø Paul G. Mahoney, who is the Dean, David and Mary Harrison

Distinguished Professor of Law, and Arnold H. Leon Professor of

Law, at the University of Virginia School of Law;

Ø Richard W. Painter, who is the S. Walter Richey Professor of

Corporate Law at the University of Minnesota Law School;


2

Ø Kenneth E. Scott, who is the Ralph M. Parsons Professor of Law,

Emeritus, at Stanford Law School; and

Ø Andrew N. Vollmer, who is Professor of Law, General Faculty, and

Director of the John W. Glynn, Jr. Law & Business Program, at the

University of Virginia School of Law, and served as Deputy General

Counsel of the SEC from 2006 to early 2009.

Given their focus on the federal securities laws, amici have a strong interest

in the questions presented here. At issue in this case is whether the fraud-on-the-

market presumption of reliance, created and held to be rebuttable in Basic Inc. v.

Levinson, 485 U.S. 224 (1988), will truly be rebuttable on a motion for class

certification, as Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398

(2014) (“Halliburton II”), said it must be. In particular, this case raises the

following questions addressing how the Basic presumption may be rebutted: what

are the proper burdens of production and persuasion when defendants seek to rebut

the Basic presumption with evidence of a lack of price impact; whether plaintiffs

may overcome or preclude a price-impact rebuttal by invoking a theory of “price

maintenance”; what evidence defendants may present to show that price

maintenance did not occur, if a price-maintenance theory is accepted a valid basis

for overcoming a price-impact rebuttal; and whether a district court may disregard

evidence demonstrating a lack of price impact because that evidence also bears on

immateriality.


3

Amici’s proposed brief reflects their consensus that these are important and

recurring questions that deserve this Court’s immediate review, and that the district

court’s resolution of those questions threatens to make the rebuttable Basic

presumption all but irrebuttable on a motion for class certification, contrary to the

Supreme Court’s command in Halliburton II. Amici believe that the authorities

and argument presented in their brief will assist the Court in deciding whether to

grant the petition for leave to appeal.

It is respectfully submitted that this motion for leave to file the attached

amici curiae brief should be granted.

Dated: New York, New York October 15, 2015

WACHTELL, LIPTON, ROSEN & KATZ

By: /s/ GEORGE T. CONWAY III George T. Conway III Charles D. Cording 51 West 52nd Street New York, New York 10019 (212) 403-1000 Attorneys for Amici Curiae


15-3179 IN THE

United States Court of Appeals FOR THE SECOND CIRCUIT

__________ ARKANSAS TEACHERS RETIREMENT SYSTEM, WEST VIRGINIA INVESTMENT

MANAGEMENT BOARD, PLUMBERS AND PIPEFITTERS PENSION GROUP, Lead Plaintiffs-Respondents,

ILENE RICHMAN, individually and on behalf of all others similarly situated, PABLO ELIZONDO,

Plaintiffs-Respondents, (Caption continued on inside cover)

__________

ON PETITION FOR PERMISSION TO APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF NEW YORK

BRIEF FOR AMICI CURIAE FORMER SEC OFFICIALS AND LAW PROFESSORS IN SUPPORT OF PETITION

FOR PERMISSION TO APPEAL

GEORGE T. CONWAY III CHARLES D. CORDING WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, New York 10019 (212) 403-1000 Attorneys for Amici Curiae

October 15, 2015


TABLE OF CONTENTS Page

INTRODUCTION AND INTEREST OF AMICI CURIAE ............................................................................................. 1

ARGUMENT ............................................................................................................ 3

CONCLUSION ....................................................................................................... 10


ii

TABLE OF AUTHORITIES Page(s)

Cases

Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184 (2013) ........................................................... 8, 9, 9n

Basic Inc. v. Levinson, 485 U.S. 224 (1988) ..................................................................................... passim

Boca Raton Firefighters & Police Pension Fund v. Bahash, 506 F. App’x 32 (2d Cir. 2012) ......................................................... 5n

Carpenters Pension Trust Fund of St. Louis v. Barclays PLC, 750 F.3d 227 (2d Cir. 2014) ................................................... 5n

City of Pontiac Policemen’s & Firemen’s Ret. Sys. v. UBS AG, 752 F.3d 173 (2d Cir. 2014) .......................................................... 4–5

ECA & Local 134 IBEW Joint Pension Trust of Chicago v. JP Morgan Chase Co., 553 F.3d 187 (2d Cir. 2009) ................................................................................ 5n

Erica P. John Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179 (2011) .......................................................................................... 3

Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) ................................................................................. passim

Reese v. Bahash, 574 Fed. App’x 21 (2d Cir. 2014) ....................................................................... 5n

Scott v. Gen. Motors Co., 605 F. App’x 52 (2d Cir. 2015) ........................................................................... 5n

Teamsters Local 445 Freight Div. Pension Fund v. Bombadier, Inc., 546 F.3d 196 (2d Cir. 2008) .................................................. 6

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) ...................................................................................... 4, 9

Statutes and Rules 15 U.S.C. § 78j(b) ........................................................................................... 10, 10n

FED. R. CIV. P. 23(b)(3) ....................................................................................... 9, 10


iii

FED. R. CIV. P. 23(f) ................................................................................................ 11

FED. R. EVID. 301 ................................................................................................ 6, 6n

Other Authorities CORNERSTONE RESEARCH, SECURITIES CLASS

ACTION FILINGS: 2014 YEAR IN REVIEW (2014) ............................................... 10n

FED. R. CIV. P. 23(f) advisory committee’s note .................................................... 11


INTRODUCTION AND INTEREST OF AMICI CURIAE1

At issue in this case is whether the fraud-on-the-market presumption of

reliance, created and held to be rebuttable in Basic Inc. v. Levinson, 485 U.S. 224

(1988), will truly be rebuttable on a motion for class certification, as Halliburton

Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (“Halliburton II”), said it

must be. Here, the district court imposed an unprecedented burden of proof on de-

fendants to “demonstrate a complete absence of price impact” with “conclusive ev-

idence” to rebut the Basic presumption. A-13 (emphasis added). In doing so, the

court effectively took away what Halliburton II granted. The defendants’ petition

presents significant and recurring issues about class certification in securities class

actions. This case thus warrants this Court’s immediate review.

Amici curiae are a group of individuals who have a strong interest in these

issues: the group consists of former Commissioners and officials of the United

States Securities and Exchange Commission, as well as law professors whose

scholarship and teaching focuses on the federal securities laws. Not every

individual amicus may endorse every statement made in this brief.2 The brief

nonetheless reflects the consensus of amici that the petition for permission to

1 No counsel for a party authored this brief in whole or in part, and no person or entity, other than amici curiae or their counsel, contributed money to fund its prep-aration or submission. Amici submit this brief with a motion for leave to file, as to which petitioners have consented and respondents have taken no position. 2 In addition, and needless to say, the views expressed by amici here do not neces-sarily reflect the views of the institutions with which they are or have been associ-ated.


2

appeal presents important questions about the fraud-on-the-market presumption

that deserve this Court’s immediate review, and that the district court’s resolution

of those questions threatens to make the rebuttable Basic presumption all but

irrebuttable on a motion for class certification, contrary to the Supreme Court’s

command in Halliburton II.

In alphabetical order, amici curiae are:

Elizabeth Cosenza, who is Associate Professor and Area Chair, Law and

Ethics, at Fordham University.

The Honorable Joseph A. Grundfest, who is the William A. Franke

Professor of Law and Business at Stanford Law School, and served as a

Commissioner of the SEC from 1985 to 1990.

Simon M. Lorne, who served as General Counsel of the SEC from 1993 to

1996.

Paul G. Mahoney, who is the Dean, David and Mary Harrison Distinguished

Professor of Law, and Arnold H. Leon Professor of Law, at the University of

Virginia School of Law.

Richard W. Painter, who is the S. Walter Richey Professor of Corporate Law

at the University of Minnesota Law School.

Kenneth E. Scott, who is the Ralph M. Parsons Professor of Law, Emeritus,

at Stanford Law School.

Andrew N. Vollmer, who is Professor of Law, General Faculty, and Director

of the John W. Glynn, Jr. Law & Business Program, at the University of Virginia


3

School of Law, and served as Deputy General Counsel of the SEC from 2006 to

early 2009.

ARGUMENT

In Halliburton II, the Supreme Court declined to abandon the fraud-on-the-

market presumption of reliance it had created in Basic. The Court emphasized

again “‘that the presumption was just that’”—a presumption—“‘and could be

rebutted by appropriate evidence,’ including evidence that the asserted

misrepresentation (or its correction) did not affect the market price of the

defendant’s stock.” 134 S. Ct. at 2414 (quoting Erica P. John Fund, Inc. v.

Halliburton Co., 131 S. Ct. 2179, 2185 (2011) (“Halliburton I”)).

The Court in Basic had repeatedly said as much: “Any showing that severs

the link between the alleged misrepresentation and … the price received (or paid)

by the plaintiff … will be sufficient to rebut the presumption of reliance.” Basic,

485 U.S. at 248 (emphasis added). If defendants show “that the market price

would not have been affected by their misrepresentations, the causal connection

could be broken: the basis for finding that the fraud had been transmitted through

market price would be gone.” Id. Basic thus made clear that the presumption was

“rebuttable” with evidence that “the misrepresentation in fact did not lead to a

distortion of price.” Id. at 248, 250.

Halliburton II reaffirmed that promise of rebuttability, and went even

further: “Price impact,” the Court held, “is thus an essential precondition for any

Rule 10b-5 class action.” 134 S. Ct. at 2416. “While Basic allows plaintiffs to


4

establish that precondition indirectly” through a presumption, “it does not require

courts to ignore a defendant’s direct, more salient evidence showing that the

alleged misrepresentation did not actually affect the stock’s market price and,

consequently, that the Basic presumption does not apply.” Id. The Court also

stressed that its “decisions have made clear that plaintiffs wishing to proceed

through a class action must actually prove—not simply plead—that their proposed

class satisfies each requirement of Rule 23, including (if applicable) the

predominance requirement of Rule 23(b)(3).” Id. at 2412 (citing Wal-Mart Stores,

Inc. v. Dukes, 131 S. Ct. 2541, 2551–52 (2011)).

Accordingly, “to maintain the consistency of the presumption with the class

certification requirements of Federal Rule of Civil Procedure 23,” the Court in

Halliburton II held that defendants may rebut the Basic presumption at the class-

certification stage with evidence of a lack of price impact: “defendants must be

afforded an opportunity before class certification to defeat the presumption through

evidence that an alleged misrepresentation did not actually affect the market price

of the stock.” Id. at 2417 (emphasis added).

The issue in this case is whether Basic’s promise of rebuttability will be

kept. The defendants presented a clear basis below for a successful rebuttal as a

matter of law: the challenged statements were “general statements about

reputation, integrity, and compliance with ethical norms,” which this Court has re-

peatedly held are immaterial and thus “inactionable” because they are “‘too general

to cause a reasonable investor to rely upon them.’” City of Pontiac Policemen’s &


5

Firemen’s Ret. Sys. v. UBS AG, 752 F.3d 173, 183 (2d Cir. 2014) (citation

omitted).3 Those precedents logically should also mean that, as a matter of law,

these statements could not impact price under Halliburton II.

But beyond the import of this Court’s precedents on that score, this case

presents important issues on how defendants can empirically rebut the presumption

of price impact and reliance under Basic and Halliburton II. Those decisions did

not spell out the precise burden of proof that must be applied. The district court

here made the burden essentially an impossible one, which is why this Court ur-

gently needs to review this case.

In a footnote in its opinion below, the district court professed to hold that

“[d]efendants must demonstrate a lack of price impact by a preponderance of the

evidence.” A-6 n.3 (citing cases). But the court did not actually apply that

standard to the issue of price impact. The defendants presented extensive evidence

showing a lack of price impact—and yet the judge did not even hold a hearing.

That is because he imposed a much heavier burden than a preponderance of the

evidence: he held that defendants had to “demonstrate complete absence of price

impact” with “conclusive evidence that no link exists between” the market price

3 See also Scott v. Gen. Motors Co., 605 F. App’x 52, 54 (2d Cir. 2015); Reese v. Bahash, 574 Fed. App’x 21, 23 (2d Cir. 2014); Carpenters Pension Trust Fund of St. Louis v. Barclays PLC, 750 F.3d 227, 235–36 (2d Cir. 2014); Boca Raton Fire-fighters & Police Pension Fund v. Bahash, 506 F. App’x 32, 37 (2d Cir. 2012); ECA & Local 134 IBEW Joint Pension Trust of Chicago v. JP Morgan Chase Co., 553 F.3d 187, 205–06 (2d Cir. 2009).


6

and the alleged misrepresentation.” A-13 (emphasis added). And again: the

defendants had “to conclusively sever this link.” A-12 (emphasis added).

This heightened, beyond-any-doubt burden cannot be justified: for one

thing, this court “hold[s] that the preponderance of the evidence standard applies to

evidence proffered to establish Rule 23’s requirements” by plaintiffs, Teamsters

Local 445 Freight Div. Pension Fund v. Bombardier, Inc., 546 F.3d 196, 202 (2d

Cir. 2008); and for another, the Federal Rules of Evidence make clear that

defendants face only “the burden of producing evidence to rebut the presumption,”

with the “burden of persuasion … remaining on the party who had it originally”—

namely plaintiffs, FED. R. EVID. 301 (emphasis added).4 This Court should set the

proper burdens of production and persuasion under Halliburton II accordingly.

It should especially do so here, because, when combined with three other

aspects of the district court’s analysis, the “conclusive evidence” standard applied

below would make it well-nigh impossible to rebut the presumption of reliance on

a motion for class certification.

First, the district court disregarded the defendants’ apparently undisputed

evidence that “the misstatements had no impact on the stock price when made.”

A-11. That fact, the district court held, “is insignificant.” Id. (emphasis added).

That conclusion inverts the Supreme Court’s decisions, which teach that the

presumption dissolves precisely when it is shown that “the misrepresentation in

fact did not lead to a distortion of price,” Basic, 485 U.S. at 248, and that if “a 4 Basic itself approvingly cited Rule 301 as the proper procedural “device for al-locating the burdens of proof between parties.” 485 U.S. at 245.


7

defendant’s direct, more salient evidence show[s] that [the] alleged

misrepresentation did not actually affect the stock’s market price, … the Basic

presumption does not apply,” Halliburton II, 134 S. Ct. at 2416. Here, the

defendants presented apparently unchallenged evidence showing that none of the

alleged misstatements—general, anodyne, aspirational statements about avoiding

conflicts of interest—caused Goldman Sachs Group’s stock to rise on any of the 18

days the statements were made. See A-11; Pet. 12, 17.

The district court’s disregard of this evidence rested on a theory of supposed

price impact—yet to be addressed by this court—that all but begs the question.

“Plaintiffs’ argument is that the misstatements simply served to maintain an

already inflated stock price.” A-11. On this handy theory of so-called “price

maintenance,” if there is any stock drop at the end of the class period, then price

impact must be assumed. The result is essentially Catch-22. It means that the

most direct evidence of an absence of price impact—evidence “that there was no

stock price increase when the statements were made”—“does not suggest lack of

price impact” at all. Id. (emphasis added). Even apart from the district court’s

“conclusive evidence” standard, this Court should address whether, or how, such

an overriding assumption of price impact can be reconciled with the Supreme

Court’s command that evidence can be marshalled to rebut it.

Second, the district court disregarded the extensive evidence that defendants

presented to rebut plaintiffs’ “price maintenance” theory. That theory supposes

that the drops in Goldman’s stock price that occurred toward the end of the class


8

period—when the market learned that Goldman was being sued and investigated—

reflected the “inflated stock price” that was supposedly “maintain[ed]” by the

various general statements Goldman made about its conflict-of-interest procedures

and other matters. Id. The defendants presented evidence that on “34 separate

dates” when the press published reports about alleged conflicts at Goldman, “there

was no movement in Goldman’s stock price.” Id.; see Pet. 5, 17–18. The

inference is obvious: if the stock didn’t move those 34 other times, then the stock

drops at the end of the class period resulted probably not from any supposed

revelation that the prior general statements about conflicts were false, but from the

market having learned that Goldman was being sued and investigated.

Yet the district court held that it could not even consider this evidence. The

district court mistakenly thought it to be a “‘truth on the market’ defense … not

appropriate at the class certification stage” under Amgen Inc. v. Connecticut

Retirement Plans & Trust Funds, 133 S. Ct. 1184, 1203–04 (2013)—that the

evidence was an attempt to demonstrate that “‘news of the [truth] credibly entered

the market and dissipated the [inflationary] effects of [prior] misstatements.’”

A-11 (quoting plaintiffs’ brief below). It wasn’t that at all: the evidence of the 34

other occasions tended to show that no stock price inflation occurred, that no

inflation was caused by or maintained by the alleged misstatements—not that there

was inflation that was later dissipated. But however the evidence is characterized,

the result again is Catch-22: under the district court’s analysis, evidence that the

stock didn’t move on the dates the challenged statements were made must be

considered “insignificant” if the plaintiff invokes the “price maintenance” theory—


9

but the defendant is precluded, supposedly by Amgen, from trying to show that

price maintenance didn’t actually occur. This Court should decide whether this

heads-plaintiffs-win, tails-defendants-lose approach can be squared with Basic and

Halliburton II.

Third, and relatedly, the district court erred in concluding that Amgen

compelled it to ignore probative evidence of price impact if the evidence also

showed lack of materiality. See A-11. That holding handcuffs defendants.

Nothing about Amgen requires the extraordinary conclusion that such evidence of

price impact be excluded from consideration on a motion for class certification.

True, Amgen held that, because the merits question of materiality did not also go to

the question of predominance under Rule 23(b)(3), defendants could not defeat

class certification by arguing on the merits that misstatements were immaterial.

See Amgen, 133 S. Ct. at 1203–04. But in Amgen itself as well as in other cases,

the Supreme Court has “cautioned that a court’s class-certification analysis must be

‘rigorous’ and may ‘entail some overlap with the merits of the plaintiff’s

underlying claim.’” Id. at 1194 (quoting Wal-Mart, 131 S. Ct. at 2551).5 And of

course the Court in Halliburton II expressly held that evidence of a lack of price

impact must be considered on a motion for class certification. The district court

surely erred in holding that Amgen requires otherwise, and this Court should hear

this case to address that holding as well. 5 As a result, Amgen does not preclude denial of class certification where the chal-lenged statements, as here, caused no price impact because they are immaterial as a matter of law, which can be determined without reaching any merits issues of ma-teriality.


10

CONCLUSION

The case presents an array of open questions about the fraud-on-the-market

presumption, questions that the Supreme Court left open in Basic and Halliburton

II: What are the proper burdens of production and persuasion when defendants

seek to rebut the presumption with evidence of a lack of price impact? To what

extent can plaintiffs overcome or preclude a price-impact rebuttal by invoking a

theory of “price maintenance”? If a price-maintenance theory can serve as a valid

basis for plaintiffs to overcome such a price-impact rebuttal, what evidence can

defendants present to show that price maintenance didn’t occur? And can a district

court really disregard evidence demonstrating a lack of price impact simply

because that evidence also bears on immateriality?

These questions need to be answered, by this Court, and they need to be

answered sooner rather than later. Every day in this Circuit, dozens of putative

securities class actions under Section 10(b) are pending in which tens of millions

of dollars, or hundreds of millions of dollars, or billions of dollars, or even tens of

billions of dollars, are potentially at stake.6 Their fates ultimately turn in large part

6 For example, according to data compiled by the Stanford Law School Securities Class Action Clearinghouse in collaboration with Cornerstone Research, during the years 2012 through 2014, some 153 securities class actions were filed in the dis-trict courts of this Circuit, far more than in any other circuit, and the aggregate “maximum dollar loss” calculated by Cornerstone for these 153 actions was $389 billion. CORNERSTONE RESEARCH, SECURITIES CLASS ACTION FILINGS: 2014 YEAR IN REVIEW 25, 30 (2014), available at http://stanford.io/1QlJtPD. Although these statistics also cover class actions brought under other liability provisions of the federal securities laws, the lion’s share no doubt involves Section 10(b)—and is thus governed by Basic and Halliburton II.


11

on whether or not classes can be certified in accordance with the strictures of Rule

23(b)(3), Basic, and Halliburton II.

Appellate review must occur, if it is ever to occur, at the time that class

certification is ordered, because very few cases like these are ever actually tried, let

alone come to this Court after a final judgment. Securities class actions are the

paradigmatic cases in which “an order granting class certification … may force a

defendant to settle rather than incur the costs of defending a class action and run

the risk of potentially ruinous liability”—precisely the situation that Rule 23(f) was

designed to address. FED R. CIV. P. 23(f) advisory committee’s note. And this

case surely involves a “certification decision [that turns] on a novel or unsettled

question of law.” Id. Review is thus warranted now.

It is respectfully submitted that the petition for leave to appeal should be

granted.

Dated: New York, New York October 15, 2015

WACHTELL, LIPTON, ROSEN & KATZ

By: /s/ GEORGE T. CONWAY III George T. Conway III Charles D. Cording 51 West 52nd Street New York, New York 10019 (212) 403-1000 Attorneys for Amici Curiae


CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitations of Fed. R. App. P.

29(d) because it contains 2,498 words, excluding the parts of the brief exempted by

Fed. R. App. P. 32(a)(7)(B)(iii).

This brief complies with the typeface requirements of Fed. R. Civ. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) becaue it has

been prepared in a proportionally spaced typeface using Microsoft Word in Times

New Roman 14-point font. /S/ GEORGE T. CONWAY III George T. Conway III

Attorney for Amici Curiae


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