Amgen, Inc. v. Connecticut Retirement Plans & Trust Funds

Supreme Court of the United States · 2013 · Corporations

568 U.S. 455 (2013)

Updated August 22, 2026

CorporationsSecurities fraudClass certificationRule 23(b)(3)Fraud-on-the-marketSection 10(b)Rule 10b-5predominance

Facts

Connecticut Retirement alleged that Amgen and several officers made misrepresentations and misleading omissions about the safety, efficacy, and marketing of two Amgen drugs, which allegedly inflated Amgen's stock price. Connecticut Retirement invoked the fraud-on-the-market presumption to seek certification of a class of investors who bought Amgen stock between the first alleged misrepresentation and the last alleged corrective disclosure. Amgen conceded that the market for its securities was efficient and did not contest the public character of the alleged statements. Amgen argued that class certification required proof that the alleged misrepresentations and omissions were material, and it offered rebuttal evidence aimed at showing immateriality.

Issue

Must a plaintiff seeking certification of a Rule 23(b)(3) securities-fraud class action under Section 10(b) and Rule 10b-5 prove the materiality of the alleged misrepresentations or omissions before class certification? Also, must the district court consider a defendant's rebuttal evidence directed solely to materiality at that stage?

Rule

Under Rule 23(b)(3), a securities-fraud plaintiff need not prove materiality at class certification to invoke the fraud-on-the-market presumption. Materiality is a common question because it is judged by an objective reasonable-investor standard, and failure of proof on materiality would end the case for all class members rather than create individual reliance issues. Merits inquiries at certification are permitted only to the extent necessary to determine whether Rule 23's prerequisites are satisfied.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Investors sue Lakeshore Robotics, a publicly traded company based in Chicago, alleging that its executives made public misstatements about a product recall. The investors seek Rule 23(b)(3) certification, and the parties agree the stock traded in an efficient market and that the statements were public.

At class certification, Lakeshore Robotics argues the investors must first prove the statements were material before they may invoke the fraud-on-the-market presumption. How should the court rule?

Explanation. Rule 23(b)(3) asks whether common questions predominate, not whether plaintiffs will win those questions on the merits. Materiality is judged by an objective reasonable-investor standard, so it is a common question. And if plaintiffs fail to prove materiality, all class members lose together; individualized reliance issues do not then predominate. Therefore, proof of materiality is not a prerequisite to certification.