On February 3, 2023, WLF urged the Supreme Court to overturn a Ninth Circuit decision that drastically expands the scope of liability under federal securities law. For more than fifty years, the federal courts of appeal have uniformly held that to prove a violation of Section 11 of the Securities Act of 1933, a plaintiff first must “trace” their shares to the offering that made the alleged misrepresentations or omissions. But a divided opinion of the Ninth Circuit swept aside that longstanding tracing requirement in favor of an expansive rule that far exceeds anything Section 11’s text can justify. In its amicus brief urging reversal, WLF asked the Court to ensure that the tasks of crafting public policy and amending federal law are performed by Congress, not the courts. This constitutional limit is even more important here because Congress, by actively amending the Securities Act nearly thirty times over the past fifty years without negating the tracing requirement, has tacitly ratified the uniform construction of the other federal courts. WLF’s amicus brief was drafted with pro bono assistance from James N. Kramer of Orrick Herrington & Sutcliffe LLP.
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