Court Opinion

ID: 8974012
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:46:15.364947+00
Date Added: 2024-06-11T17:10:30.385760
License: Public Domain

KRAYITCH, Circuit Judge,
dissenting:
I agree with Judges Johnson, Hatchett, and Clark that the appellants have raised a genuine issue of material fact as to the marketability of the bonds, thereby precluding a grant of summary judgment. I hesitate to add yet another voice to the chorus of opinions in this case; nevertheless, I believe that some further observations are in order.
The majority concludes that the structure of the first proposed bond offering was so different from the final deal offered to the public that a warning as to the feasibility of the original deal “generates no reasonable inference regarding the marketability of the final deal.” Maj. op. at 730. Yet, as Judge Hatchett suggests, the very question of whether the structure of the two deals differed so significantly is itself a question of fact, and one as to which the appellants have raised a genuine issue of material fact. The majority opinion and *746Judge Clark’s dissent demonstrate that reasonable minds may differ as to whether the changes between the bond issue as first planned and as finally executed enhanced the marketability of the bond offering. When the facts and the inferences drawn from the facts are disputed, summary judgment is not proper.
Because I believe the district court erred in granting summary judgment for appel-lees, I must address the question that the majority does not reach — whether we should overrule Shores. I believe that principles of stare decisis weigh heavily against overruling Shores. If the rule adopted in Shores should be modified, then Congress or the Supreme Court may do so.
Appellees and several amici suggest that Shores is inconsistent with the Supreme Court’s recent decision in Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988), which relied in part on the efficient market hypothesis to support its application- of the fraud-on-the-market theory’s rebuttable presumption of reliance in Rule 10b-5 cases. I recognize that Basic Inc. involved a well-developed, i.e., “efficient” market, and that Shores and the instant appeal involve undeveloped, inefficient markets. I also recognize that the efficient market hypothesis would not justify indirect proof of reliance absent an efficient, developed market. Yet Basic Inc. did not adopt the efficient market hypothesis as the law of the land. Although economic theory may provide courts with guidance, and perhaps insight, the science of economics remains as inexact as the “science” of law itself.1 I would not revisit and overturn prior decisions simply to bring them into conformity with current— and probably passing — economic fashion.

. As Justice White noted in Basic Inc.,
while economists’ theories which underpin the fraud-on-the-market presumption may have the appeal of mathematical exactitude and scientific certainty, they are — in the end — nothing more than theories which may or may not prove accurate upon further consideration.
108 S.Ct. at 995 (White, J., joined by O’Connor, J., dissenting).