The Diminishing Role of the Private Attorney General in Antitrust and Securities Class Action Cases Aided by the Supreme Court

Abstract

The U.S. Supreme Court's 2008 decision in Stoneridge Investment Partners, LLC v. Scientific-Atlantic, Inc. illustrated a reformulation of the private-attorney-general model for enforcing federal laws. This case, which rejected another attempt to expand scheme liability in private securities actions to create a new class of defendants, recognized the possible harms from private enforcement. At the same time, it described alternative methods of deterring bad behavior – namely, state and government enforcement. Stoneridge thus follows a pattern of recent securities and antitrust Supreme Court cases that have scaled back on the private attorney general method of enforcement in favor of a more nuanced approach that limits the expansion of private litigation where the harms could exceed its benefits. This article won the 2010 Burton Award for Legal Writing Achievement.

Keywords: Securities, Antitrust, Class Action, Private Attorney General, Stonebridge, Attorneys Fees, Scheme Liability, Trinko, Dura, Broudo, Credit Suisse, Billing, Leegin, Twombly, Bell Atlantic, Tellabs