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The Houston Chronicle is reporting that the Supreme Court has not granted cert in what is known as the "Enron case": University of California Regents v. Merrill Lynch. The AP story starts with the following: "The Supreme Court today put off deciding on the Enron scandal, taking no action in a securities fraud case with billions of dollars at stake for victimized investors." Besides the slanted rhetoric, the story doesn't exactly explain the current posture of the cert petition. The case was scheduled for the conference on Thursday. The case will now be either re-listed or held. (If re-listed, it should appear on the docket again in a few days.) However, the case may be being held until after Stoneridge. If the Stoneridge case is decided inconsistently with the Fifth Circuit's opinion in the Enron case and the cert petition is being held, then the case will be vacated and remanded.

I think many people have assumed that the Court would hear both cases together, but in talking to people much more in the know than I am, I did not have the same impression. Most importantly, the Enron case is a cert petition from a class certification reversal. The 2-1 reversal by a Fifth Circuit panel was on the grounds that Central Bank precludes the plaintiffs from having claims against secondary actors, but that concept is worked into a denial of class certification, which is strained. As the dissent points out, going to Central Bank to reverse class certification was not even necessary: "[I]n my view, the majority commits a significant error by even reaching this issue. Because the issue on which the majority opinion bases its decision today-a significant and unsettled question about the scope of primarily liability under Section 10(b) -is unnecessary to a determination of whether the plaintiffs have satisfied the prerequisites for maintaining a class action under Federal Rule of Civil Procedure 23, we should not consider it on this interlocutory appeal of class certification." Therefore, this appeal is not in a good vehicle for the court to change or extend Central Bank precedent. I'm fairly certain that an appeal of the denial of a motion to dismiss was pending before the Fifth Circuit, so I'm not sure why the class certification appeal was chosen as the vehicle to flex some Central Bank muscle.

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The Houston Chronicle is reporting that the Supreme Court has not granted cert in what is known as the "Enron case": University of California Regents v. Merrill Lynch. The AP story starts with the following: "The Supreme Court today put off deciding on the Enron scandal, taking no action in a securities fraud case with billions of dollars at stake for victimized investors." Besides the slanted rhetoric, the story doesn't exactly explain the current posture of the cert petition. The case was scheduled for the conference on Thursday. The case will now be either re-listed or held. (If re-listed, it should appear on the docket again in a few days.) However, the case may be being held until after Stoneridge. If the Stoneridge case is decided inconsistently with the Fifth Circuit's opinion in the Enron case and the cert petition is being held, then the case will be vacated and remanded.

I think many people have assumed that the Court would hear both cases together, but in talking to people much more in the know than I am, I did not have the same impression. Most importantly, the Enron case is a cert petition from a class certification reversal. The 2-1 reversal by a Fifth Circuit panel was on the grounds that Central Bank precludes the plaintiffs from having claims against secondary actors, but that concept is worked into a denial of class certification, which is strained. As the dissent points out, going to Central Bank to reverse class certification was not even necessary: "[I]n my view, the majority commits a significant error by even reaching this issue. Because the issue on which the majority opinion bases its decision today-a significant and unsettled question about the scope of primarily liability under Section 10(b) -is unnecessary to a determination of whether the plaintiffs have satisfied the prerequisites for maintaining a class action under Federal Rule of Civil Procedure 23, we should not consider it on this interlocutory appeal of class certification." Therefore, this appeal is not in a good vehicle for the court to change or extend Central Bank precedent. I'm fairly certain that an appeal of the denial of a motion to dismiss was pending before the Fifth Circuit, so I'm not sure why the class certification appeal was chosen as the vehicle to flex some Central Bank muscle.

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