Tuesday, April 19, 2005

'The Ninth Circuit Erred'

A unanimous Supreme Court says you have to have a clue before filing a securities fraud class action suit. Contrary to the Nutty Ninth in Dura Pharmaceuticals v Broudo:

Ordinary pleading rules are not meant to impose a great burden on a plaintiff, but it should not prove burdensome for a plaintiff suffering economic loss to provide a defendant with some indication of the loss and the causal connection that the plaintiff has in mind. Allowing a plaintiff to forgo giving any indication of the economic loss and proximate cause would bring about the very sort of harm the securities statutes seek to avoid, namely the abusive practice of filing lawsuits with only a faint hope that discovery might lead to some plausible cause of action.

Meaning Bill Lerach and his colleagues in the Trial Lawyer Industry lose another round to the
Private securities litigation reform act. And that the celebration here, should be underway.

Also, the unlikely pair of Paul Krugman and Ben Stein should be crying in their beer.

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