## Facts

- In 1982, Christ M. Rousseff purchased $2 million in limited partnership interests in an oil-and-gas venture (Anadarko Oil & Gas Partners 1982).
- E.F. Hutton & Company acted as the offering’s exclusive sales agent and solicited Rousseff’s investment through its employee(s).
- Rousseff was told projections that the well contained approximately 6–10 billion cubic feet (BCF) of gas.
- Hutton had an internal projection estimating reserves at approximately 3.6 BCF, which was not disclosed to Rousseff.
- The well later proved less productive than represented, with reserves ultimately set at under 4 BCF.
- Rousseff sued under federal securities law, the Florida Securities and Investor Protection Act (Fla. Stat. §§ 517.301, 517.211), and common-law fraud.
- After settlements with other defendants, the federal case proceeded against Hutton; the jury verdict and district court judgment allowed rescission.
- On appeal, the Eleventh Circuit reversed on the federal and common-law fraud claims for failure to submit proximate causation of loss to the jury, and certified a state-law question on the Florida statutory claim to the Florida Supreme Court.

## Issues

1. In a civil action under Fla. Stat. §§ 517.301 and 517.211, must the claimant prove that the defendant’s fraud proximately caused the claimant’s loss (loss causation)?

## Decision

- The Florida Supreme Court accepted jurisdiction on the certified question and answered it “no.”
- The court held that a plaintiff suing under Fla. Stat. §§ 517.301 and 517.211 is not required to prove loss causation as an element of the statutory claim.
- The court’s answer was returned to the Eleventh Circuit for further proceedings consistent with the state-law ruling.

## Legal Principles

- Fla. Stat. § 517.211 supplies an express civil remedy (including rescission or transaction-based damages), and courts should not add extra, judge-made elements not found in the statutory scheme.
- Although Fla. Stat. § 517.301 resembles federal Rule 10b-5 in antifraud wording, Florida’s statutory structure is narrower and includes an explicit, transaction-centered remedy.
- Federal “loss causation” doctrine developed in Rule 10b-5 litigation as a judicial limitation within a broad implied cause of action; that rationale does not control when a legislature provides a defined civil remedy.
- The Florida remedy is analogous to transaction-based remedies historically associated with federal Securities Act § 12(2), which do not require proof that the misstatement proximately caused a later economic loss.

## Conclusion

The Florida Supreme Court held that civil liability under Fla. Stat. §§ 517.301 and 517.211 does not require proof that the alleged fraud proximately caused the investor’s loss; the statutory claim focuses on material misrepresentation or omission in the securities sale and the statute’s express remedies.


E.F. Hutton & Co. v. Rousseff, 537 So. 2d 978 (Fla. 1989)