Wednesday was a big day for amicus briefs in Stoneridge in support of Respondents.  In addition to those already discussed (the 27 Luminaries, the Solicitor General, and NAM), we note in passing that briefs were filed by the American Bankers Association, the Chamber of Commerce, the Business Roundtable, Nasdaq/NYSE, among others.  These briefs are posted on the DU Corporate Governance web site. 

One of the more interesting was filed by an illustrious group of corporate-securities lawyers, including Richard Beattie (Simpson Thacher), Kenneth Bialkin (Skadden, Arps), Arthur Fleischer (Fried, Frank), Joseph Flom (Skadden, Arps), Ira Millstein (Weil, Gotshal), Jack Nusbaum (Willkie Farr) and Norman Veasey (Weil, Gotshal).  A copy of the brief can be found at the DU Corporate Governance web site.  Their interest in the case?  If Petitioner's theory of primary liability is adopted, "the ability of amici , an numerous other lawyers practicing in these areas, to provide legal guidance to their clients based upon certain clear and predictable legal standards will be impaired." 

The brief argues that primary liability ought to be limited to "a misstatement or failure to disclose by one who has a duty to disclose."  Indeed, they read Central Bank as limiting liability "to those who themselves actually make a material misstatement or violate a duty to disclose, or who employ a manipulative device as that term of art has been interpreted." 

This view is consistent with the lower court decision.  It is, however, not consistent with the position taken by the Solicitor General.  As the Solicitor General noted: 

• "Properly understood, a person engages in “deceptive” conduct for purposes of Section 10(b) when the conduct by its nature is objectively likely to mislead another person, e.g. , when it has the effect of conveying a false appearance of material fact to an observer (assuming, of course, that the defendant possessed the requisite mental state in engaging in the conduct). Respondents’ alleged conduct constituted a “deceptive device or contrivance” because it not only was likely to, but allegedly did, mislead Charter’s outside accountant, Arthur Andersen, about the nature of the transactions into which respondents had entered. Such a reading of Section 10(b) does not nullify this Court’s holding in Central Bank . . . "

Given the position of the Solicitor General, it will be tough for the Supreme Court to accept the position taken by counsel in this brief.