Christine Hurt has reviewed SCOTUS nominee Sonia Sotomayor's securities regulation decisions and reports:
I gathered 26 cases, dating back to 1994. Of these 26 cases, three were actions brought by the SEC, and two were criminal actions brought by the U.S. government. Of those cases, the SEC won all three and the U.S. government won both of its prosecutions.
The remaining 21 lawsuits seem to have results typical to those of most private securities lawsuits: the defendant wins, usually on a motion to dismiss, which is affirmed by the court of appeals. Specifically, in 16 cases the defendant was granted relief. In four cases, the defendant was granted some, but not all, of the relief requested or one defendant was granted relief, but not all. Of these four cases, no plaintiff won on a core 10b-5 securities law issue (was there reliance? materiality? loss causation?). For example, in one case, the second circuit held that although the federal securities claims were dismissed, a state law duty existed for a fiduciary duty claim. In another, several individual defendants were not granted a motion to dismiss on Section 11 claims. In another, even though the case was dismissed, the court held that the lead plaintiff had standing. The other case in which plaintiffs won partial relief was Dabit v. Merrill Lynch, which Sotomayor probably got right and the Supreme Court (reversing) probably got wrong. (My colleague Larry Ribstein's post on this is here.) In the one case where the plaintiff won outright, the plaintiff won summary judgment in a bench trial against a foreign bank.
Although pundits are scouring her other opinions to find judicial activism, there's none here in the 10b-5 arena. If we're worried about the nominee showing empathy instead of following the law, there's no evidence of runaway shareholder empathy!
This is consistent with the general consensus that Sotomayor will be neither reflexively pro- or anti-business, but will decide these cases fairly fairly (so to speak).
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