Amgen Inc. v. Connecticut Retirement Plans and Trust Funds - Oral Argument - November 05, 2012

Amgen Inc. v. Connecticut Retirement Plans and Trust Funds

Media for Amgen Inc. v. Connecticut Retirement Plans and Trust Funds

Audio Transcription for Opinion Announcement - February 27, 2013 in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds

Audio Transcription for Oral Argument - November 05, 2012 in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds

John G. Roberts, Jr.:

We'll hear argument next in Case 11-1085, Amgen, Incorporated v. The Connecticut Retirement Plans and Trust Funds.

Mr. Waxman.

Seth P. Waxman:

Mr. Chief Justice, and may it please the Court:

Our case is about whether the claim of liability is in a fundamental sense class wide or individual.

The heart of a 10b-5 claim is, I bought or sold in reliance on a misleading statement.

The question at the class cert stage is whether each individual will have to prove his own reliance directly on the statement, or whether every -- he can prove indirectly reliance on the statement by showing that everybody relied on a distorted market price.

A market price will reflect a statement if and only if the statement is material and is made publicly on an efficient market.

So, absent materiality, the market price cannot be presumed to reflect the statement in question.

And the plaintiffs--

John G. Roberts, Jr.:

Why is that -- why is that the case?

I would suppose if there's no materiality, that means that the effect on the market price just happens to be zero.

Seth P. Waxman:

--That's exactly correct.

And the point here is--

John G. Roberts, Jr.:

Well, why isn't that common to all parties?

Seth P. Waxman:

--Mr. Chief Justice, every one of the four predicates to the fraud-on-the-market theory, which is a shortcut that -- that excuses plaintiffs from proving that I heard the statement and relied on it -- every one of those predicates is common.

Whether the market is efficient is common.

Whether the statement is public is common.

Whether the stocks were bought and sold during the period of market distortion is common.

And materiality is common.

The question is not whether--

Sonia Sotomayor:

So is the falsity of the statement common as well?

Seth P. Waxman:

--The falsity of the statement is common, but it is not a predicate to whether or not you can prove reliance on a statement indirectly by relying on the integrity of the market price, because in an efficient market, material public statements, whether they are true or false, will presumably move the market price.

And if you're trying to prove reliance on a false--

Sonia Sotomayor:

Can an individual who has -- it has been deemed in -- in a cert certification that an issue is immaterial, could an individual claimant ever prove it's material?

Seth P. Waxman:

--Sure.

I'm not arguing--

Sonia Sotomayor:

On the truth-on-the-market -- the truth-on-the-market defense, which is the type of defense that you're raising here.

Seth P. Waxman:

--Yes.

Either way.

Let me explain why.