## Facts

- Ernest Ray Ritch and Mary J. Ritch purchased securities through The Robinson-Humphrey Company, a brokerage firm.
- The Ritches alleged the brokerage sold the securities in violation of the Alabama Securities Act’s civil-liability provision, Ala. Code § 8-6-19(a)(1).
- The asserted statutory violation was based on an alleged breach of Alabama Securities Commission Rule 830-X-3-.12 governing broker conduct.
- The Ritches pursued the claim in federal court under Alabama law.
- The United States Court of Appeals for the Eleventh Circuit certified a question to the Supreme Court of Alabama asking whether, for this statutory claim, the plaintiffs must prove that the rule violation caused or induced their purchase.

## Issues

1. Whether a private action under Ala. Code § 8-6-19(a)(1) premised on a violation of Alabama Securities Commission Rule 830-X-3-.12 requires proof that the violation caused or induced the plaintiff’s purchase of the security.

## Decision

- The Supreme Court of Alabama answered the certified question: causation is not an element of a claim under § 8-6-19(a)(1) based on a violation of Rule 830-X-3-.12.
- The court held the statute requires only proof that the defendant sold a security to the plaintiff and that the sale occurred “in violation of” a rule imposed under the Alabama Securities Act.
- Because the case arrived on a certified question, the court did not enter a merits judgment for either party; it provided controlling state-law interpretation for the federal proceeding.

## Legal Principles

- When statutory language is unambiguous, courts apply its plain meaning and do not add elements not expressed in the text.
- Ala. Code § 8-6-19(a)(1) imposes civil liability on a seller who sells a security in violation of a rule adopted under the Alabama Securities Act to the buyer of that security.
- For § 8-6-19(a)(1) claims predicated on Rule 830-X-3-.12, the plaintiff need not prove transaction causation, inducement, reliance, or proximate causation; liability attaches upon proof of a rule-violating sale to the plaintiff.
- Courts should not import federal securities-law causation concepts to alter the meaning of a clear Alabama statute.

## Conclusion

The Supreme Court of Alabama held that a buyer suing under Ala. Code § 8-6-19(a)(1) for a sale made in violation of Alabama Securities Commission Rule 830-X-3-.12 is not required to prove that the rule violation caused or induced the purchase; proving a rule-violating sale to the buyer is sufficient.


Ritch v. Robinson-Humphrey Co., 748 So. 2d 861 (Ala. 1999)