When the Supreme Court issued its decision in Wal-Mart Stores, Inc. v. Dukes in 2011, defense lawyers hailed the case as a game-changer that would level the class action playing field in an arena that traditionally favored plaintiffs with various presumptions promoting class certification. Trying to limit its impact, plaintiff lawyers argued that Dukes was limited to employment cases, but we have since seen it relied upon in all manner of antitrust, advertising and other consumer protection class certification settings.

Is the shoe now on the other foot with the Supreme Court’s recent plaintiff-friendly decision in Amgen Inc. v. Connecticut Retirement Plans & Trust Funds? In a majority opinion authored by Justice Ginsburg, the court ruled that plaintiffs need not prove materiality to invoke a fraud-on-the-market theory of classwide reliance in a securities class action. The fraud-on-the-market theory holds that an efficient stock market will reflect all publiclyavailable and material information about a given security, so classwide reliance on material statements may be presumed in cases pled under Section 10-b(5) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The problem with the materiality question in these cases is that it is both an element of the claim (therefore a merits issue ineligible for resolution on class certification) and also a predicate for invoking fraud-on-the market to demonstrate that reliance is a common issue (and therefore seemingly crucial to class certification decision-making).

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