On Friday, September 19, 2020, Justice Ruth Bader Ginsburg died following her latest battle with cancer. The second-serving woman on the U.S. Supreme Court, Justice Ginsburg was a trailblazer, respected jurist, and a late-in-life popular cultural icon and role model: the Notorious R.B.G., clad in her “dissent” collar. Her death triggered shockwaves of emotions, with reflections on her long, storied career quickly turning to debates over when to confirm her successor. In death, just as in life, Justice Ginsburg will have a significant and lasting impact on our country.
A Pragmatic Leader
Countless obituaries and tributes have detailed Justice Ginsburg’s long career, from her humble origins in Brooklyn, to the top ranks of her law schools. When denied employment at law firms upon graduation, she found work as a law professor. She founded the Women’s Rights Project at the A.C.L.U., waging a lifelong battle for the equal protection for women. On a case-by-case, step-by-step process, she was vigilant in pursuing cases where women and men were targeted for disparate treatment. As an attorney, she argued six cases before Supreme Court, orchestrating challenges to persuade the Court to hold that the 14th Amendment guarantee of equal protection extended to sex discrimination. Ever the pragmatist, she understood that “[r]eal change, enduring change, happens one step at a time.”
In 1980, President Carter appointed Justice Ginsburg to the U.S. Appeals Court for the District of Columbia, where she served for 13 years, before being appointed to the U.S. Supreme Court by President Clinton in 1993. Overwhelmingly confirmed by a vote of 96 to 3, she went on to serve for 27 years, drafting over 200 majority opinions, including landmark equal protection cases. In one of her most significant decisions, she authored a majority opinion holding the all-male admissions policy at the Virginia Military Institute unconstitutional, ruling: “[i]nherent difference between men and women, we have come to appreciate, remain cause for celebration, but not for denigration of the members of either sex or for artificial constraints on an individual’s opportunity. Sex classifications . . . may not be used, as they once were, to create or perpetuate the legal, social, and economic inferiority of women.”
As the Court’s majority grew more conservative, Justice Ginsburg became known for her powerful dissenting opinions, often read from the bench, including in Bush v. Gore, voting rights cases, and, famously, in Ledbetter v. Goodyear Tire and Rubber Company, where her dissent to an onerous time limitation to bring Title VII challenges resulted in a change of the law through the enactment of the Lilly Ledbetter Fair Pay Act of 2009.
A Friend of Shareholders
During her tenure on the Court, Justice Ginsburg was a steady protector of the rights of shareholders. She long recognized and supported the private right of action under the federal securities laws, writing: “This Court has long recognized that meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought, respectively, by the Department of Justice and the Securities and Exchange Commission.”
Justice Ginsburg’s rulings strengthened shareholders ability to preserve the fraud-on-the-market presumption recognized in Basic v. Levinson in proving reliance at class certification. She pushed back at attempts by corporate defendants to accelerate merits inquiries to the class certification stage. For example, in joining the majority in Halliburton Co. v. Erica P. John Fund, Inc., which reaffirmed the applicability of the fraud-on-the-market presumption, Justice Ginsburg wrote a short concurring opinion emphasizing that the “Court’s judgment . . . should impose no heavy toll on securities-fraud plaintiffs with tenable claims.” In Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, Justice Ginsburg delivered the opinion of the Court holding that proof of materiality of alleged misrepresentations is not a prerequisite to class certification, and that the materiality of corporation’s alleged misrepresentations and omissions was a question common to all class members.
Justice Ginsburg also strove to hold all wrongdoers accountable, including so-called secondary actors likes auditors, customers, and vendors, although, here, she advocated through her dissents. For example, in 1994, she dissented from the majority opinion in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., which held that private plaintiffs could not maintain aiding and abetting claims under Section 10(b). Justice Ginsburg joined a dissenting opinion that stressed the importance of holding secondary actors liable under the federal securities laws as aiders and abettors, and the value of allowing private litigants to pursue such claims. In 2008, she again dissented from a ruling that vendors and customers could not be liable under the federal securities laws. In Stoneridge Investment Partners, LLC v Scientific-Atlanta, Inc., the dissenters highlighted that the vendors and customers knowingly played a necessary role in the alleged fraud by entering into sham transactions to deceive auditors and inflate financials. As Justice Ginsburg and the other dissenting Justices found, the financial fraud could not have occurred “absent the knowingly fraudulent actions” of the customers and vendors and, thus, such conduct is a “deceptive device” action under 10(b) in a private right of action. While the Court’s conservative majority rolled back the rights of investors to pursue participants in securities fraud, Justice Ginsburg vigilantly tried to stem the tide.
Justice Ginsburg also sought to ensure that investors were not barred unfairly from the courthouse steps due to arbitrary timing constraints. In Merck & Co, Inc. v. Reynolds, she voted with the majority in holding that the time for a plaintiff to file a federal securities fraud lawsuit begins to run as soon as a plaintiff discovers, or should have discovered, the facts showing a violation of securities law, including facts that the defendant knew that the statements were false. In California Public Employees’ Retirement Systems v. ANZ Securities, Inc., she dissented from an opinion that the class action tolling doctrine established in American Pipe & Construction Co. v. Utah, does not extend to the three-year statute of repose contained in the Securities Act of 1933. In her dissent, Justice Ginsburg stated that she would have ruled that the timely filing of a putative class action on behalf of an investor class effectively commences a class member’s action arising from the same set of alleged misrepresentations or omissions. Further, she warned that that majority ruling would force investors to file protective complaints or motions to intervene to preserve their individual claims.
This is not to say that Justice Ginsburg was slavishly pro-plaintiff. In Tellabs, Inc. v. Makor Issues & Rights, Ltd., she wrote the majority opinion establishing a heightened pleading standards for plaintiffs; she concurred in Morrison v. National Australia Bank, which limited the extraterritorial reach of the federal securities laws. And in China Agritech, Inc. v. Resh, she drafted the majority opinion that held that upon denial of class certification, a putative class member may not, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations.
Uncertain Future
Justice Ginsburg’s death comes weeks before the opening of the Court’s 2020-21 term and less than two months before the presidential election. On September 26, 2020, President Trump nominated Judge Amy Coney Barrett to succeed Justice Ginsburg, and Senate Major Leader Mitch McConnell announced plans to bring the nominee before the Senate for a vote, possibly before the election. Critics, meanwhile, accused Sen. McConnell of hypocrisy, given his refusal to hold a vote on President Obama’s nomination of Judge Merrick Garland in 2016, almost 9 months before election day and before party nominees had even been solidified. Vice President Biden has stated, “The voters should pick the president, and the president should pick the justice for the Senate to consider.” Either way, there will be a vigorous fight and this issue will take center stage in the election.
Any eventual replacement could have a significant impact on shareholder rights. As noted above, Justice Ginsburg was a loyal vote in favor of an expansive fraud-on-the-market presumption in securities litigation. This fall, the Court will consider whether to take an appeal on that very issue. See Supreme Court 2020 Term – A Preview. And while a conservative majority could curtail the scope of investor protections, Justice Ginsburg’s dissents will live on. As Justice Ginsburg once remarked, “Dissents speak to a future age. It’s not simply to say my colleagues are wrong and I would do it this way, but the greatest dissents do become court opinions.”