On January 15, 2008, in a 5-3 majority opinion (here) written by Justice Kennedy (pictured to the left), the U.S. Supreme Court affirmed the Eighth Circuit in the Stonridge Investment Partners, LLC v Scientific Atlanta case. The Court concluded that the implied right of action under Section 10(b) did not reach the respondent companies’ conduct because the investor claimants did not rely on the alleged deceptive conduct. Justice Stevens, joined by Justices Souter and Ginsberg, dissented. Justice Breyer, as previously disclosed, did not take part in the case.
Neither presumption applies here. Respondents had no duty to disclose; and their deceptive acts were not communicated to the public. No member of the investing public had knowledge, either actual or presumed, of respondents’ deceptive acts during the relevant time. Petitioner, as a result, cannot show reliance upon any of respondents’ actions except in an indirect chain that we find too remote for liability..