In 2014, I filed a Supreme Court amicus brief on behalf of various U.S. Senators and Representatives—including Barbara Boxer, Ed Markey, John Dingell, John Conyers, and Maxine Waters—who were involved in legislation regarding securities laws (e.g., laws regulating stocks, bonds, etc.). The case was Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317. At issue was whether a 1988 Supreme Court case regarding the securities laws—Basic, Inc. v. Levinson—should be overturned.
Basic established something called the "fraud-on-the-market theory," which made it easier for investors to bring suit under the 1934 Securities and Exchange Act to recover damages for a company's misrepresentations that affected the stock price. Investors have to show they relied on the misrepresentation when deciding to buy or sell the stock, and the "fraud-on-the-market theory" authorized a presumption that the market itself reflects the misrepresentation, such that the investor automatically relied on it when buying or selling the stock.
A class of investors (including Erica P. John Fund, Inc.) brought such a lawsuit against Halliburton, alleging its misrepresentations wrongly inflated its stock price and, once corrected, caused the stock to drop, which in turn caused the investors to lose money. In the Supreme Court, Halliburton argued that Basic should be overruled. Part of Halliburton's argument was that Congress had effectively overruled it already through securities' reform legislation passed in 1995 (the PSLRA), because that law was silent regarding the "fraud-on-the-market theory." Some Senators and Representatives agreed and filed a brief to that effect. The investors disagreed, and so did numerous other Senators and Representatives involved in passing the law. Their view was that Congress understood Basic was established law and that they were legislating over that established backdrop. I filed an amicus brief on their behalf to make that point to the Supreme Court. My essential argument was that Supreme Court decisions interpreting Congressional statutes—such as the 1988 Basic decision did with regard to the 1934 Securities and Exchange Act—are entitled to special force when Congress acquiesces in the decision (even silently) when legislating further in that field.
In the end, the Supreme Court did not overrule Basic. The fraud-on-the-market theory remained intact. The Court's decision is here.
The text of the amicus brief is below. Co-counsel on the brief was Barry Weprin of NYC-based Milberg LLP, which specializes in investor suits. The full list of Amici (the various Senators and Representatives) is at the end of the brief.