Amgen Inc. v. Connecticut Retirement Plans and Trust Funds
In Amgen Inc. v. Conn. Ret. Plans and Trust Funds. 133 S. Ct. 1184 (2013), the Court found that a failure to establish materiality could not result in the continuation of any individual claims, because immateriality would be fatal to all plaintiffs claims. Id.
Because materiality is an element of every fraud claim, immateriality absolutely destroys both class and individual causes of action. The absence of materiality ends the case for one and for all. Id. The questions before the Amgen Court were whether the putative class must establish materiality at class certification to invoke the presumption; and relatedly, whether a defendant is entitled to rebut the presumption at class certification with proof of immateriality. Id. at 1194.
The Amgen Court began by emphasizing that the central issue in resolving this question was whether proof of materiality was required to satisfy Rule 23(b)(3)s requirement of common question predominance. Id. at 1195.
Thus, the twin issues of what a plaintiff must prove and what a defendant may rebut at class certification are resolved by the same inquiry: The pivotal inquiry is whether proof of materiality is needed to ensure that the questions of law or fact common to the class will predominate over any questions affecting only individual members as the litigation progresses. Id. (quoting FED. R. CIV. P. 23(b)(3)).
Thus, the focus of the 23(b)(3) class certification inquiry-predominance-is not whether the plaintiffs will fail or succeed, but whether they will fail or succeed together. Id. at 1197.
In Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184 (2013), a class alleged securities fraud under 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U.S.C. 78j(b), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. 240.10b-5. 133 S. Ct. at 1191.
To succeed on the merits, plaintiffs alleging securities fraud under Rule 10b-5 must prove (1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation. Id. at 1192.