Bernstein Liebhard LLP Partner Jeffrey M. Haber is the author of a recent article appearing in the October 2010 edition of the Securities Litigation Report, entitled “Schleicher v. Wendt Impact: The Seventh Circuit Splits with the Fifth Circuit on Class Certification Requirements.” The article discusses the impact of Schleicher v. Wendt, a Seventh Circuit decision, authored by Chief Judge Frank Easterbrook, that rejects the requirements set forth in Oscar Private Equity Investments v. Allegiance Telecom, Inc., 487 F.3d 261 (5th Cir. 2007), that a plaintiff in a securities class action prove loss causation and materiality in order to certify a class pursuant to Rule 23 of the Federal Rules of Civil Procedure. The Seventh Circuit rejected the Fifth Circuit’s rationale and holding, explaining that if a defendant operated in an efficient market, under Basic Inc. v. Levinson, 485 U.S. 224 (1988), investors can use the fraud-on-the-market doctrine as replacement for person-specific proof of reliance and causation in order to certify a securities class action arising under § 10(b) of the Securities Exchange Act of 1934 (15 U.S.C.A. § 78(j)(b)) and Rule 10b-5 (17 C.F.R. § 240.10b-5) promulgated thereunder. A copy of the article is available here.
Partner Jeffrey M. Haber Authors Recent Article on the Impact of Schleicher v. Wendt – The Requirements for Certifying a Class Pursuant to Rule 23 of the Federal Rules of Civil Procedure