Basic Inc. v. Levinson
United States Supreme Court
485 U.S. 224 (1988)
Starting in 1976, Combustion Engineering, Inc. (Combustion) had discussions with directors of Basic Inc (Basic) (defendants) about a possible merger between the corporations. Over the next two years, Basic made three public statements denying that it was engaged in any merger negotiations. Allegedly in reliance on those statements, the plaintiffs sold their stock in Basic at artificially low prices. The plaintiffs then brought a class action suit against Basic and its directors, alleging that the false public statements violated SEC Rule 10b-5. The district court certified the class, but granted summary judgment to the defendants, finding that statements about merger negotiations are not material statements of fact. The United States Court of Appeals for the Sixth Circuit affirmed the class certification based on the fraud-on-the-market theory of reliance, but reversed the summary judgment. The United States Supreme Court granted certiorari on the two issues.
Rule of Law
Holding and Reasoning (Blackmun, J.)
Concurrence/Dissent (White, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 175,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.