please tell me something about American judicial system

please tell me something about American judicial system
美国司法制度

US Supreme Court continues pattern of pro-corporate rulings
Last week the US Supreme Court issued two opinions sharply curtailing investor rights to sue for fraud and other abuses in the sale of corporate shares.
In the case Credit Suisse Securities (USA) LLC v. Billing, investors filed suit alleging that major investment banks acting as underwriters violated the federal antitrust laws when they formed syndicates to publicly sell initial shares in hundreds of companies during the 1990s technology bubble. In order to garner excessive commissions, the underwriters would not sell the shares unless the investors agreed to purchase at a later date additional shares at higher prices as well as other shares in less desirable companies, and to pay unusually high commissions rates.
The court did not dispute that such practices could violate the antitrust laws. But, in a 7-1 decision written by Justice Stephen Breyer, the court ruled that the lawsuit could not proceed because it raised the risk of an outcome that might be inconsistent with results in actions brought by the Securities and Exchange Commission (SEC) on investors under the federal laws regulating securities. According to the court, that threatened the efficient operation of securities markets.
The court reached its result based on this generalized concern even though it conceded that under its prior case law, the antitrust claims could be thrown out only if they were “plainly repugnant” to the securities laws. It also conceded that the SEC itself had forbidden the conduct in question.
In a rare dissent to his usual pattern of pro-corporate rulings, Justice Clarence Thomas pointed out that the federal securities laws specifically state that the remedies they provide are in addition to any and all remedies existing under other laws. Since the federal antitrust laws were passed in the 1890s, before passage in the 1930s (following the stock market crash that ushered in the Depression) of the federal securities laws, Thomas reasoned that Congress could not have meant to exclude application of the antirust statutes to securities activity.
In Tellabs, Inc. v. Makor Issues & Rights, LLC, the court, in a case where plaintiffs alleged in their federal court complaint that a company and its officers had made false statements about company earnings and demand for its product, addressed the standard for alleging what is known in the law as “scienter”—the intention to deceive, manipulate or defraud. In an 8-1 decision authored by Justice Ruth Bader Ginsburg, the court adopted a high standard that will result in most securities fraud cases being tossed out by judges at the outset of a case.
In US federal court for decades, the standard for due process purposes for a complaint initiating a lawsuit has been that it need only provide a short and plain statement of facts sufficient to give fair notice of the claim. All factual allegations in a complaint are accepted as true for purposes of determining at the beginning of a lawsuit its legal sufficiency. If a case clears that initial hurdle, the plaintiff has the right to proceed to obtain discovery from opposing parties and witnesses of supporting facts prior to actual trial.
A special rule for fraud cases has also required that the allegedly fraudulent statements be pleaded with specificity or “particularity” In securities fraud cases, however, many courts required only a general allegation of an intention to defraud, without factual substantiation, recognizing that usually only defendants themselves know why they did what they did.
These standards did not please Wall Street. It complained that defendants routinely faced—and often were forced to settle just to avoid—protracted and expensive proceedings in “frivolous” cases. In 1995, during the high-tech bubble, Congress responded by passing the Private Securities Litigation Reform Act of 1995, signed by President Bill Clinton, imposing heightened pleading requirements for securities fraud cases.
The 1995 law requires a complaint to set forth facts with particularity sufficient to explain the reasons why the allegedly fraudulent statements were false and misleading, and to permit a “strong inference” of the defendant’s intent to defraud. This has given trial court judges much more leeway, which they have widely exercised, to dismiss securities fraud cases at the outset, before corporate and investment banking defendants can be subjected to court-sanctioned discovery of documents and testimony relating to the alleged fraud.
The discouraging effect on such litigation has been pronounced. Shareholder class-action lawsuits filed in federal courts dropped from a high of 497 in 2001 to 57 so far this year. This decline was not due to a sudden wave of corporate adherence to scrupulous honesty. Quite the contrary. The Enrons, WorldComs and Tycos made it apparent just how large and pervasive corporate securities fraud had become. Workers have lost billions of dollars in retirement and investment accounts. But Congress did not amend the 1995 law to again liberalize pleading standards in response to these scandals.
In practice, it has proven quite difficult for plaintiffs to obtain the detailed facts that courts have required to meet the heightened pleading standards of the 1995 law. Naturally, corporate defendants typically do not freely make public the proof of their wrongdoing.
The appellate court that decided the Tellab case, the Seventh Circuit, joined other courts in interpreting the “strong inference” of an intent to deceive requirement of the 1995 law to require only that facts be alleged that would permit a reasonable person to form the inference that the defendant had an intention to defraud investors The appellate court worried that any stricter standard could offend the jury trial guarantee of the Seventh Amendment of the Constitution, in that it would substitute the judge in place of the jury as the fact finder. Given that the federal courts have been stacked under the Bush presidency with judges hostile to those seeking relief against business, this concern is far from theoretical.
Under the 1995 law, other appellate courts have required that the inference of intent to deceive be at least as plausible as an inference that the defendant had innocent intent. The Supreme Court decision adopted this latter standard in Tellabs Justice Ginsburg’s opinion states that the facts must be more than merely plausible or reasonable—they must be “cogent” and at least as compelling as any opposing inference of non-fraudulent intent.
Ginsburg’s opinion brushes off the right to a jury trial with the hollow and inapt observation that courts can always kick cases out short of trial when the facts alleged or proven do not permit a reasonable person to infer wrongdoing. But by definition, a case alleging facts that permit a reasonable inference of wrongdoing is not frivolous.
In an opinion concurring in the result, right-wing Justices Scalia and Thomas went even further. They would require that the inference of scienter must be more plausible than that of innocence. As they undoubtedly know, if adopted that would for all practical purposes eliminate securities fraud suits.
Justice John Paul Stevens was the lone dissenter in Tellabs He would instead apply a standard for pleading scienter of “probable cause,” the same burden of proof used for obtaining criminal warrants and indictments. “It is most unlikely that Congress intended us to adopt a standard that makes it more difficult to commence a civil case than a criminal case,” Stevens said.(我课堂上做的TRIAL PATTERN论题演讲的文章)