U.S. Court of Appeals for the Second Circuit

Case Status


Docket Number



Case Updates

Appeal held in abeyance

April 27, 2015

The Second Circuit issued an order granting the joint motion to adjourn oral argument and holding appeal in abeyance pending the district court’s action with respect to the proposed settlement.

U.S. Chamber urges Second Circuit to review district court securities liability decision

June 06, 2014

In its brief, the Chamber urged the Second Circuit to reverse the District Court’s decision, which expanded the presumption of reliance in Affiliated Ute impermissibly. The Chamber explained that the presumption of reliance under Affiliated Ute is a narrow and highly circumscribed exception to the fundamental requirement that plaintiffs must plead fraud, including the traditional elements of reliance and causation, in order to state a claim under Rule 10b-5. The Supreme Court’s holding rests firmly on two rationales, neither of which applies here. First, the Affiliated Ute presumption reflects the concern that pleading reliance would be practically impossible where the defendant is not alleged to have made any misstatement to which the plaintiffs can point. Second, Affiliated Ute is applicable only where a defendant owes an affirmative duty of disclosure to the plaintiff based on the relationship between the parties—a duty to disclose that would apply even in the absence of any prior statement that is alleged to be false or misleading. The Chamber argued that the district court’s extension of the Affiliated Ute presumption in this case lacks any legitimate basis, and, if upheld, would undermine the fundamental elements of a claim of securities fraud under section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

Steven G. Bradbury and Elisa T. Wiygul of Dechert LLP represented the U.S. Chamber of Commerce as Co-Counsel to the National Chamber Litigation Center in this case.

Case Documents