Unlike most other jurisdictions, the United States relies on an "opt out" procedure for aggregate litigation, rather than "opt in." The US approach allows for litigation involving large classes, creating potentially enormous liabilities. This course will introduce students to the procedures used for aggregate litigation in the US, the issues created by lawsuits with potentially enormous consequences for the parties, as well as recent reforms in the area. We will begin by exploring the basic framework of "opt-out" class actions under Rule 23 of the Federal Rules of Civil Procedure. The bulk of the class will be devoted to securities fraud class actions under section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and the reforms to securities fraud class actions instituted by the Private Securities Litigation Reform Act of 1995. We will pay some attention to shareholder class actions under state corporate law and the effect of the Securities Litigation Uniform Standards Act of 1998. Finally, we will compare the practice of securities class actions in Australia and Canada.
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