In an opinion yesterday, Judge Forrest rejected a proposed securities class action settlement in which the settlement class was defined identically to a class that she had earlier ruled could not be certified. The earlier certification denial was based in part on the plaintiffs’ failure to show class-wide reliance under the “fraud-on-the-market” presumption. The parties pointed Judge Forrest to the Second Circuit’s 2012 decision in In re AIG, Inc. Sec. Litig., which held that “[b]ecause settlement eliminates the need for trial, a settlement class ordinarily need not demonstrate that the fraud-on-the-market presumption applies to its claims in order to satisfy the predominance requirement.” But Judge Forrest ruled that the AIG case did not altogether eliminate the requirement that class-wide issues predominate, even for purposes of a settlement class, and that the parties had not made the necessary showing:
Continue Reading Judge Forrest Rejects Securities Class Action Settlement Because “Settlement Class” Failed Certification Standards