BOSTON, April 8, 2026 /PRNewswire/ — In a new report, Brattle economists provide a systematic examination of federal district court and appellate court orders regarding class certification in securities litigation issued in 2025, analyzing how defendants challenged predominance under Rule 23(b)(3) and how courts evaluated those arguments.
In Testing the Limits of Fraud-on-the-Market: Class Certification Orders in 2025, the authors analyze these decisions to identify recurring themes in how courts addressed arguments challenging predominance for reliance and damages. Across the cases examined, defendants frequently sought to rebut the fraud-on-the-market presumption of reliance by arguing that its underlying assumptions were not met – for example, that the alleged truth was already reflected in the market, that the market was not efficient, or that the alleged misrepresentations did not impact price.
The report finds that federal district courts granted class certification in full in most cases (12 of 18). In cases where courts did not grant full certification (6 of 18 cases), they did so primarily on the basis of challenges to reliance.
Among the report’s key findings:
- Courts took differing approaches to truth-on-the-market arguments, with some engaging directly and others deferring these issues to the merits stage.
- Market efficiency challenges did not result in any denials or limitations of class certification in 2025, even when defendants affirmatively argued that markets were inefficient.
- Price impact challenges succeeded only in limited circumstances, with courts accepting “mismatch” arguments under Goldman ATRS in a subset of cases, eliminating some – but not all – of the pled misrepresentations and corrective disclosures on this basis.
- Damages methodology challenges were consistently rejected by district courts.
The report also highlights how evolving appellate guidance may shape how courts evaluate economic arguments at the class certification stage. In addition to the Sixth Circuit’s decision in FirstEnergy – which vacated class certification and called for a rigorous analysis of damages under Comcast – the Fourth and Fifth Circuits also granted appellate review in cases in which defendants appealed on the basis of market efficiency and damages.
Further judicial developments may influence the extent to which courts engage with case-specific economic arguments at the class certification stage – rather than deferring them to the merits – with implications for litigation strategy in securities cases.
Testing the Limits of Fraud-on-the-Market: Class Certification Orders in 2025 was authored by Principals Andrew Roper, Mame Maloney, Brendan Rudolph, and Ravi Sinha, and Associate Aidan Kutner.
The full report is available at https://www.brattle.com/insights-events/publications/testing-the-limits-of-fraud-on-the-market-class-certification-orders-in-2025/.
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