On Monday, the Supreme Court will hear oral argument in the Amgen case. The official questions presented are:
1. Whether, in a misrepresentation case under SEC Rule 10b-5, the district court must require proof of materiality before certifying a plaintiff class based on the fraud-on-the-market theory.
2. Whether, in such a case, the district court must allow the defendant to present evidence rebutting the applicability of the fraud-on-the-market theory before certifying a plaintiff class based on that theory.
The court will be addressing a circuit split on these issues. Three circuit courts (Second, Fifth and, to a lesser extent, the Third) previously have held that materiality is a required part of the fraud-on-the-market analysis when evaluating whether a class should be certified. The Ninth Circuit joined a decision from the Seventh Circuit, however, in rejecting that position and holding that materiality is a merits question that does not affect whether class certification is appropriate.