While both big businesses and small investors exhorted the Court to resolve the dispute in Amgen v. Connecticut Retirement Plans and Trust Funds based on policy preferences, the Court hewed instead to text and history in its 6-3 ruling on February 27, allowing the securities fraud case to proceed as a class action. The Court’s opinion, written by Justice Ginsburg (and joined by Chief Justice Roberts and Justices Breyer, Alito, Sotomayor and Kagan), remained true to the text of the Federal Rules of Civil Procedure governing class certification and left policy decisions to Congress, citing relevant legislative history.
The plaintiff-investors in Amgen claimed that misleading statements by the defendant pharmaceutical company regarding the safety and efficacy of its flagship drugs led to an inflated price for the company’s stock. When the truth came to light, they alleged, the price of the stock plummeted, causing financial harm to investors who had purchased the stock at the inflated price. The company countered that its alleged misrepresentations were immaterial. The Court took up the question of whether the district court should have required the investors to prove the materiality of the alleged false statements prior to certifying a class action.