## Facts

- Amgen Inc. marketed two anemia drugs, Epogen and Aranesp, whose safety and proper use were the subject of FDA review and advisory committee attention.
- An institutional investor, Connecticut Retirement Plans and Trust Funds, alleged that Amgen and certain officers made public misstatements or omissions about the drugs’ safety risks, negative clinical data, and regulatory interactions.
- The investor claimed the alleged misstatements inflated Amgen’s stock price and that later disclosures (including May 10, 2007) caused a stock drop of more than 9%.
- The proposed class consisted of purchasers of Amgen common stock between April 22, 2004 and May 10, 2007.
- Plaintiffs sought class certification under Rule 23(b)(3) and relied on the fraud-on-the-market presumption of classwide reliance.
- The district court certified the class without requiring proof of materiality at certification and declined to adjudicate Amgen’s truth-on-the-market evidence at that stage.
- The Ninth Circuit affirmed, holding that materiality need not be proven at class certification.

## Issues

1. Whether plaintiffs invoking the fraud-on-the-market presumption in a §10(b)/Rule 10b-5 class action must prove materiality at the class-certification stage to satisfy Rule 23(b)(3) predominance.
2. Whether defendants are entitled at class certification to defeat the presumption by introducing truth-on-the-market evidence aimed at showing immateriality.

## Decision

- The Supreme Court affirmed in a 6–3 decision authored by Justice Ginsburg.
- The Court held that proof of materiality is not required at class certification in a fraud-on-the-market securities-fraud class action.
- The Court also held that defendants are not entitled to litigate truth-on-the-market evidence at class certification when it functions as an argument that the alleged misstatements were immaterial.

## Legal Principles

- Materiality is a substantive element of a §10(b)/Rule 10b-5 claim, but it is a common, objective question for the class and does not generate individualized reliance issues.
- Rule 23(b)(3) predominance is concerned with whether common questions will drive resolution; because immateriality defeats the claims for all class members, it does not defeat predominance.
- Courts may examine merits questions at certification only to the extent they overlap with Rule 23 requirements; Rule 23 does not authorize a broad merits trial at certification.
- Truth-on-the-market arguments that the market already knew the information address materiality and generally belong at summary judgment or trial rather than class certification.

## Conclusion

The Court ruled that in securities-fraud class actions relying on fraud-on-the-market, plaintiffs need not prove materiality at the class-certification stage, and defendants cannot require adjudication of truth-on-the-market immateriality evidence to defeat certification under Rule 23(b)(3).


Amgen Inc. v. Connecticut Ret. Plans & Tr. Funds, 568 U.S. 455 (2013)