Dura Pharmaceuticals, Inc. v. Broudo, Supreme Court of the United States, April 19, 2005 [ruling that plaintiffs bringing securities fraud claims cannot establish economic loss necessary for such claims by showing that stock prices were inflated at the time of purchase]. Excerpt from the unanimous opinion by Justice Breyer:

A private plaintiff who claims securities fraud must prove that the defendant's fraud caused an economic loss. 109 Stat. 747, 15 U. S. C. §78u—4(b)(4). We consider a Ninth Circuit holding that a plaintiff can satisfy this requirement — a requirement that courts call "loss causa-tion"—simply by alleging in the complaint and subsequently establishing that "the price" of the security "on the date of purchase was inflated because of the misrepresentation." 339 F. 3d 933, 938 (2003) (internal quotation marks omitted). In our view, the Ninth Circuit is wrong, both in respect to what a plaintiff must prove and in respect to what the plaintiffs' complaint here must allege.

Read the full text of the opinion [PDF]. Reported in JURIST's Paper Chase here.