Page:Amicus brief - Stoneridge v Scientific-Atlanta - Chamber of Commerce of the United States of America.pdf/21

 12 render subsections (a) and (c) of Rule 10b-5 a nullity. See, e.g., Pet. Br. at 24. Liability when a silent defendant breaches a duty to disclose does not arise under Rule 10b-5(b) because that subpart addresses only speaking defendants. Specifically, Rule 10b-5(b) applies only when a defendant “make[s] any untrue statement of material fact” and “omit[s] to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading,” i.e., half-truths. (Emphasis added.) In contrast, Rule 10b-5(a) and (c) apply to at least four kinds of actionable conduct by non-speaking defendants—demonstrative conduct (e.g., nodding assent at a press conference), omitting to disclose conduct by a party with a duty to disclose, insider trading, and market manipulation. Indeed, this Court’s cases dealing with breach of a duty to disclose and insider trading have frequently arisen under Rule 10b-5(a) and (c). See, e.g., O’Hagan, 521 U.S. at 651; SEC v. Zandford, 535 U.S. 813, 819 (2002); Affiliated Ute Citizens v. United States, 406 U.S. 128, 152-53 (1972). Section 10(b) does not proscribe deceptive conduct in the abstract, however. To “use or employ” a deceptive device within the meaning of § 10(b), a defendant must actually mislead someone. See O’Hagan, 521 U.S. at 655, 659 n.9, 660. In a private civil case, that someone must be the plaintiff. Private civil liability statutes, including the implied cause of action under § 10(b), incorporate the general principle that a plaintiff must show not merely a violation of law, but breach of a legal duty owed to that specific plaintiff. See, e.g., Bangor Punta Operations, Inc. v. Bangor & Aroostook R.R., 417 U.S. 703, 716 n.13 (1974) (“the recovery provided is intended to compensate, not the public generally, but those who have been injured by a breach of duty owed to them”) (emphasis added); Foss v. Bear, Stearns & Co., 394 F.3d 540, 541 (7th Cir. 2005) (Easterbrook, J.) (§ 10(b) private civil claim requires deceit against the plaintiff); Moss v. Morgan Stanley, Inc., 719 F.2d 5, 13, 16 (2d Cir. 1983)