Opinion ID: 616889
Heading Depth: 1
Heading Rank: 2

Heading: Opportunity to Rebut the Presumption at the Class Certification Stage

Text: Amgen also argues that the district court erred by not affording it an opportunity to rebut the fraud-on-the-market presumption at the class certification stage. Specifically, Amgen sought to introduce evidence that FDA announcements and analyst reports about Amgen's business publicized the truth about the safety issues looming over Amgen's drugs, and thus that Amgen's alleged misrepresentations could not have affected the stock pricethe so-called truth-on-the-market defense. See, e.g., Basic, 485 U.S. at 248-49, 108 S.Ct. 978 ([I]f, despite [defendants'] allegedly fraudulent attempt to manipulate market price, [the truth] credibly entered the market and dissipated the effects of the misstatements, those who traded... after the corrective statements would have no direct or indirect connection with the fraud.). But as the Supreme Court and Ninth Circuit have explained, the truth-on-the-market defense is a method of refuting an alleged misrepresentation's materiality. See, e.g., Va. Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1097-98, 111 S.Ct. 2749, 115 L.Ed.2d 929 (1991); Provenz v. Miller, 102 F.3d 1478, 1492 (9th Cir.1996). As explained above, a plaintiff need not prove materiality at the class certification stage to invoke the presumption; materiality is a merits issue to be reached at trial or by summary judgment motion if the facts are uncontested. The only elements a plaintiff must prove at the class certification stage are whether the market for the stock was efficient and whether the alleged misrepresentations were publicissues that Amgen does not contest here. Thus, the district court correctly refused to consider Amgen's truth-on-the-market defense at the class certification stage. AFFIRMED.