Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, March 1, 2010

Law Professors File Amici Brief on Behalf of Respondents in Morrison

Richard Painter (University of Minnesota) is the principal drafter of an amici curiae brief (Download Morrison08-1191bsacLawProfessors) filed on behalf of a group of law professors in support of respondents in Morrison v. National Australia Bank Ltd.  Morrison, you will recall, is currently before the U.S. Supreme Court and involves foreign investors who purchased securities of a foreign issuer in a foreign market and seek to bring a Rule 10b-5 action in federal district court.  While amici agree with the Second Circuit's holding that the plaintiffs cannot sue, they do not believe the court's reasoning with consistent with the legislative intent of Congress when it passed section 10(b).  Instead of the balancing test used by the Second Circuit, the amici argue for a bright line rule predicated on Congressional intent to regulate U.S. securities markets but not to regulate foreign securities markets.  If adopted by the Supreme Court, the bright line test, based on congressional intent, would provide predictability for transacting parties in the global securities market and avoid burdening the U.S. courts with foreign disputes that are better resolved by the courts of the countries involved. The brief relies on the research of Margaret V. Sachs (University of Georgia) and her 1990 law review article, The International Reach of Rule 10b-5: The Myth of Congressional Silence.

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