U.S. Supreme Court oks securities class action, worker retaliation claims

By Kimberly Atkins Dolan Media Newswires BOSTON, MA--Incidental reports of problems can satisfy the materiality requirement in a securities fraud claim, the U.S. Supreme Court ruled today. The unanimous ruling in Matrixx Initiatives v. Siracusano found that such reports need not be statistically significant to make a showing of material misrepresentation or omission in a security class action case. The case was brought by investors of drug maker Matrixx Initiatives alleging that the company violated the Securities Exchange Act by failing to disclose reports of adverse health events and pending lawsuits involving Zicam nasal spray. "Medical experts and the FDA rely on evidence other than statistically significant data to establish the existence of causation," Justice Sonia Sotomayor said in announcing the decision from the bench today. "It stands to reason that reasonable investors would as well. In Kasten v. Saint-Gobain Performance Plastics, the Court held that an employee who verbally complained of workplace issues to his employer has "filed a complaint" under the anti-retaliation provision of the Fair Labor Standards Act of 1938. A complaint need not be written to constitute being "filed," the 6-2 Court held. (Justice Elena Kagan did not participate.) "The word 'file' sometimes refers to a writing, but sometimes it doesn't," said Justice Stephen Breyer in announcing his majority opinion. Justice Antonin Scalia, in a dissent joined by Justice Clarence Thomas, disagreed, writing that "[w]hile the jurisprudence of this Court has sometimes sanctioned a 'living Constitution,' it has never approved a living United States Code." "What Congress enacted in 1983 must be applied according to its terms, not according to what a modern Congress (or this Court) would deem desirable.'' Entire contents copyrighted © 2011 by Dolan Media Company. All rights reserved. Reproduction in whole or in part without written permission is expressly forbidden. Published: Thu, Mar 31, 2011