A roundup this morning on Stoneridge v. Scientific Atlanta, heard yesterday by the U.S. Supreme Court. Much-attended oral arguments, appropriately so, since this is the biggest business-related case of the year.
Reporters’ general consensus is that the justices will side with the defendants, meaning to be sued for securities fraud, a company would actually have to have some causal connection to the fraud. If that indeed proves to be the ruling, the winners will be suppliers, manufacturers and all the other businesses that keep this nation’s economy rolling — and the investors who in invest in those companies. (See it’s not an investor-against-business case.)
The Washington Post remains stuck on its “It’s All About Enron” view of the case, although also concluding that the justices seemed disinclined to expand the world of litigation as the plaintiffs asked. For a classic use of the passive voice, this paragraph is very nice:
The case involves a cable company and the suppliers of cable boxes, but it has largely been seen as a stand-in for investors who want to go after banks and others who allegedly allowed Enron to disguise its financial problems.
Really? Who has seen it that way? Washington Post reporters? Largely?
The much-watched Linda Greenhouse at the New York Times includes a “shadow of Enron” reference, but her story is straightforward:
Shareholders looking for deep pockets to sue in securities fraud cases faced an uphill battle at the Supreme Court on Tuesday.
Also a straight report from James Oliphant of the Chicago Tribune, who added the color we were looking for:
The closely watched dispute is one some observers have labeled the “Roe vs. Wade” of securities law, one in which more than 30 friend-of-the-court briefs were filed, and it played to an electric atmosphere in a packed Supreme Court chamber.
Pshaw. Which observers, James? Newsroom wags?
The Houston Chronicle? OK, we’ll forgive them the Enron obsession. In Houston, the paper’s sports pages and weekly food sections recipes throw in Enron references. And reporter Patty Reinert included a good citation from an attorney for its investors, sounding like Edward G. Robinson in Little Caeser.
Patrick Coughlin, a lawyer for investors trying to collect $40 billion from Enron’s bankers, conceded on the courthouse steps that Tuesday’s case involving another company could end in a 4-4 tie after Justice Stephen Breyer excused himself from participating. That tie would be a loss for investors.
But Coughlin added that he is “hoping against hope that Justice Clarence Thomas comes out of the blue” and that Justices John Paul Stevens and Anthony Kennedy will join Ginsburg and Souter in a 5-3 decision in favor of investors. If they don’t, he said, “it’s the end of the case for Enron.”
And finally, from the New York Law Journal, a comment from the NAM’s own deputy general counsel, Quentin Riegel:
Quentin Riegel, general counsel of the National Association of Manufacturers, who attended the arguments, pronounced himself “cautiously optimistic” that the Court will not go along with the investors’ position.
“They seemed to recognize that the broad rule sought by the petitioner would be hard to limit,” he said.
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