Two more items regarding the Stoneridge (a.k.a. Charter Communications) case on scheme liability:
(1) Although Chief Justice Roberts and Justice Breyer initially recused themselves from the case because of personal stockholdings, the New York Law Journal reports that they may be back in time for the argument (scheduled for October 9, 2007). Under a new federal law, the justices could sell their stockholdings and, because the sale was done to resolve a conflict of interest, defer any capital gains tax. The article speculates that Chief Justice Roberts may have rejoined a case earlier this year, the day before oral argument, by resolving a conflict through a stock sale.
Quote of note: “‘The justices who recused are – I don’t want to use the term – business-friendly,’ said Stephen Bainbridge, who participated in a brief that opposed the investors’ broad liability theory. But Mr. Bainbridge, a professor at UCLA School of Law, said the Court can be especially unpredictable in securities cases, because the justices and their law clerks are ‘institutionally incompetent’ to resolve complex securities cases. ‘I would never count the chickens before they hatch,’ he said.”
(2) The WSJ Law Blog has a post on the large number of amicus briefs that have been filed in the case.
Quote of note: “At final count, about 30 ‘friend of the court’ briefs (aka amicus briefs) were filed with the court in Stoneridge, which asks whether shareholders can sue to hold third parties — e.g., investment banks, accountants and law firms — liable for a company’s fraud. It’s a ‘startling’ number of friend-of-the-court briefs for a securities-law case, says Tom Goldstein, a Supreme Court practitioner at Akin Gump, not involved in the case.”
The 10b-5 Daily 