The Supreme Court's decision in the Stoneridge case has largely been interpreted as a imposing a strict, pro-defendant reliance requirement. This article offers an alternative reading that takes the Court's analysis more seriously than its overheated dicta, one that makes "remoteness" a serious and meaningful inquiry that can produce balanced and fair responses to the concern that seemed to motivate the search for restraint: fear of disproportionate liability. It explores the nature of the dispropotion, and suggests ways--using the Court's own explanatory tools--for deciding when third party involvement is close enough to the fraud so that fear of disproportion lessens. Among other things, this approach leads clearly to a rejection of the so-called "attribution" approach for liability. Recognizing that a statutory solution may be better than judicial patchwork, it also offers a coupling of expanded liability with a more rational and sensible proportionate liability regime than now exists.
158 U. Pa. L. Rev. 2125-2171 (2010)
Scholarly Commons Citation
Langevoort, Donald C., "Reading Stoneridge Carefully: A Duty-based Approach to Reliance and Third Party Liability Under Rule 10b-5" (2010). Georgetown Law Faculty Publications and Other Works. Paper 421.