The shareholders' firm Labaton Sucharow has a huge decision to make in the next couple of weeks, one that may affect not only Labaton's business but the entire securities class action bar. Its quandary: Should Labaton lawyers who've handled a class action against Amgen since 2007 defend the 9th Circuit Court of Appeals class certification ruling at the U.S. Supreme Court, which agreed Monday to hear the case? Or should Labaton and its client, the Connecticut Retirement Plans and Trust Funds, bring in a Supreme Court specialist to go up against Amgen's appellate gun, Seth Waxman of Wilmer Cutler Pickering Hale and Dorr?

Every securities firm has a stake in the answer to that question. The issue in Amgen, as Kevin LaCroix discusses in a typically authoritative post at the D&O Diary, is whether shareholders have to show the materiality of alleged misstatements in order to win class certification or whether, under the U.S. Supreme Court's 1988 fraud-on-the-market ruling in Basic v. Levinson, the class needs only demonstrate an efficient market and allegedly public misstatements. The 9th Circuit sided with Amgen shareholders in setting the class certification bar low; Amgen argued in its petition for certiorari that there's now a clear split among circuits, with the 2nd and 5th demanding a showing of materiality for class certification and the 3rd permitting defendants to at least raise a materiality defense. Given the leverage that class certification confers on shareholders in settlement talks, if the Supreme Court makes it harder to certify a securities fraud class, its ruling could be devastating for investors.

Labaton's Jonathan Plasse was counsel of record on the Connecticut funds' brief opposing Amgen's bid for cert. And the firm has a recent history at the Supreme Court: Partner Thomas Dubbs argued for shareholders in the infamous Morrison v.National Australia Bank case in 2010. Nevertheless, you can be sure that since Monday, Labaton and its client are debating the pros and cons of bringing in a specialist to handle the Amgen Supreme Court appeal. On one hand, securities class action litigation is a specialized practice, and it can be important for advocates at the high court to be familiar with the particular nuances and history of the underlying case. On the other hand, Supreme Court litigation is increasingly the domain of a rarified club of specialists who know how to tailor arguments to appeal to particular justices. Amgen clearly believes in the expertise of the Supreme Court club. It was represented by Sheppard Mullin Richter & Hampton at the 9th Circuit but hired Waxman and Wilmer for its cert petition.

With that in mind, I thought it would be instructive to look at who argued major Supreme Court securities cases in the last few years. A caveat: Supreme Court pundits say briefs carry more weight than oral advocacy, and we all know that the justices bring their own ideology to deliberation. So we can't assume results would have been different if different lawyers had been involved. Nevertheless, recent history suggests Labaton and the Connecticut funds should think very hard about bringing in an appellate expert.

The class action bar's most consequential recent Supreme Court losses have come in cases argued by plaintiffs' firms. Labaton's own defeat in Morrison is a prime example: The court barred securities class actions against foreign-listed companies, in a ruling that has benefited defendants far beyond the bounds of the underlying securities fraud case. There's also the 2005 decision in Dura Pharmaceuticals v. Broudo, which raised the bar for loss causation. That case was argued for shareholders by Patrick Coughlin of the firm now known as Robbins Geller Rudman & Dowd. In its 2008 ruling in Stoneridgev. Scientific-Atlanta, the Supreme Court barred shareholder claims against law firms and financial advisers that allegedly abetted securities fraud; Stanley Grossman of the plaintiffs' firm Pomerantz Haudek Block Grossman & Gross argued and lost that case for shareholders.

Three recent Supreme Court wins for the securities class action bar, meanwhile, have been argued by lawyers with appellate expertise. David Boies of Boies, Schiller & Flexner -- whose expertise seems to know no bounds -- won a limited ruling last June in Erica P John Fund v. Halliburton, a precursor to Amgen that involved the 5th Circuit's standard for securities class certification. (Boies's firm had been involved before the case got to the Supreme Court, so it's not entirely analogous to Amgen.) Last March, David Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel was the shareholders' counsel of record in the Supreme Court's ruling in Matrixx Initiatives v. Siricusano, which held that plaintiffs can show materiality without having to prove unreported information was statistically significant. The Matrixx case had been handled in lower courts by Robbins Geller, which brought Frederick in for the Supreme Court phase. Frederick also won the 2010 ruling in Merck v. Reynolds, which set a shareholder-friendly standard for when the statute of limitations begins. Bernstein Litowitz Berger & Grossmann brought Frederick into that case; Merck also brought in Supreme Court specialists from Williams & Connolly to supplement its counsel from Cravath, Swaine & Moore.

The shareholders' hired guns don't always win at the Supreme Court, though. Frederick argued and lost last term's ruling on who "makes" a statement for the purposes of securities fraud liability in Janus v. First Derivative Traders, a case that Kirby McInerney handled in the lower courts. Arthur Miller, then a professor at Harvard, argued for shareholders in Tellabs v. Makor, a Millberg case. He lost a ruling that raised the bar for establishing fraudulent intent. (The defendants in Tellabs also had a Supreme Court specialist, Carter Phillips of Sidley Austin, but Sidley had already handled the case in the 7th Circuit.)

I called Labaton's Plasse, but he's out of the office and unavailable. I also left word with Michael Hennigan of McKool Smith, who argued at the 9th Circuit for the Connecticut funds suing Amgen, but didn't hear back. David Frederick of Kellogg Huber declined comment.

(Reporting by Alison Frankel)

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