January 22, 2008
SCOTUS Denies Cert. in Enron Case
Posted by Christine Hurt

I'm running off to class, but I just noticed this WSJ article reporting that the U.S. Supreme Court has refused to hear the appeal of class certification in the Enron shareholder lawsuit.  At first glance, however, the article seemed to overstate the importance of not granting certiorari:

The denial is an indication the high court doesn't believe the Enron suit met the standards set in the Stoneridge ruling for securities class-action lawsuits to proceed. Taken with separate action the court took in a class-action appeal over an accounting scandal at Homestore.com, the court also sent a message that accounting and banking firms are clearly covered by the Stoneridge ruling.

Although one can infer that the Supreme Court is not rushing to make clear that Stoneridge doesn't apply to financial and legal third-parties, I don't think that one can infer that the Supreme Court believes the Enron case and the Stoneridge case to be the same based solely on a cert denial. There are a lot of wacky things about the Enron appeal that make it a poor candidate for a grant -- its procedural posture as an appeal of a denial of class certification for one. I predict that the Court will affirm in the next few years that Stoneridge applies to other third parties besides vendors, but I think the Court wants to do so in a different case. More later.

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