Settling a class action case means you don't have to try it. But does making peace also mean you don't have to turn all the square corners of the class action rule, the one we call 23?
It does. Kind of. At least to the extent it avoids trial problems. The kind that could make it go on and on. And on.
The Supreme Court ruled thus in Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997). The Court held that, because settling means not having a trial on the merits at all, you don't have to worry about managing it. Rule 23(b)(3)(D) has a manageability requirement.
But how far does that get you? Does it let you forego, for instance, showing one of the toughest things that plaintiffs need to prove in a stock fraud case — that the jury can presume all buyers of the stock relied on the market price as a True Reflection of the stock's Actual Value?
The Second Circuit ruled last week that it does. In Ohio Public Retirement Sys. v. Gen'l Reins. Corp. (In re Am. Int'l Group, Inc. Sec. Litig.)., No. 10-4401-cv (2d Cir. Aug. 13, 2012), the panel reversed the trial court's denial of a motion to certify a securities fraud case against American International Group and its sub General Reinsurance as a class action under Rule 23 of the Federal Rules of Civil Procedure.
The ruling strikes Blawgletter as a rare, but welcome, nod towards the fact that courts ought not insist on near-perfection, whether in class actions or in non-class cases.