| Abstrakt: |
This Article unites two disparate subjects of profound interest to legal scholars. One is fraud-on-the-market, reaffirmed late last term in Erica P. John Fund, Inc. v. Halliburton Co. (Halliburton II). Probably the most important claim in the securities litigation universe, Jraud-on-the-market is the sine qua non of almost every securities class action that is filed. The other subject consists of the judicial opinions of Judges Frank Easterbrook and Richard Posner, the "superstars" of the current federal appellate bench. My purpose is several-fold: first, to show that fraud-on-the-market's evolution, up through and culminating in Halliburton II, has been driven in significant measure by an unheralded series of contributions by Judge Easterbrook, Judge Posner, or a combination; and second, to reveal, by the use in part of an empirical spotlight, the strategies that they employed to bring their contributions to life. Judges Easterbrook and Posner influenced fraud-on-the-market by dominating the development of Rule 23(f) of the Federal Rules of Civil Procedure. Effective beginning more than ten years after Basic Inc. v. Levinson, Rule 23(ft facilitates permissive appeals of certification orders, where fraud-on-the-market issues tend to arise. Their domination of Rule 23(ft's development has had three dimensions. First, Judge Posner played a role in prompting the Rule's adoption. Second, he or Judge Easterbrook authored the Seventh Circuit's first seventeen reported Rule 23(f) opinions. Those opinions, which urged active use of the Rule in general and expressed antipathy towards fraud-on-the-market in particular, helped to fuel a series of rulings in other circuits that were hostile to fraud-on-the-market. Third, Judge Easterbrook thereafter wrote a Rule 23(f) opinion supportive of fraud-on-the-market, which influenced the Supreme Court's approach in Halliburton II and elsewhere. Judges Easterbrook and Posner advanced their views by employing various strategies, including occasionally depicting precedent with less than complete accuracy. Other strategies seemed aimed at maximizing their opportunities to write Rule 23(f) opinions in the first place. Indeed, when serving as the presiding judge of their respective panels, they assigned Rule 23(f) opinions only to themselves or each other. Moreover, they had a greater number of such opinions to assign than would otherwise have been the case because the panels over which they presided tended to follow a peculiar practice upon granting permission to appeal a certification order, namely, retaining the appeal for decision rather than surrendering it for reassignment. There is cause at least to wonder whether, by so doing, they assumed more authority over important questions of class action law than any two jurists ought to have had. Two perspectives have to date inhibited the exploration of the superstars' entrepreneur ship. One holds that essentially all judicial activity tends to be all strategy, all the time. This perspective fails to appreciate the singular role played by the superstar judges in the formulation of the legal canon and the consequent importance of focusing on their operations. The other perspective regards entrepreneurship as noteworthy only to the extent that it occurs at the Supreme Court. This view ignores the fact that the superstar judges approach Supreme Court Justices in terms of the degree of influence that they wield. [ABSTRACT FROM AUTHOR] |
