Causal connection between fraud and economic loss

AND · 15usc78j:loss-causation

Distinguish loss causation from reliance/transaction causation. Identify loss caused by the fraud rather than unrelated market or business developments; Dura does not require one particular form of corrective disclosure.

Exact element source

any manipulative or deceptive device or contrivance

Source: docroot/ir/usc/title15.jsonl#title15_sec78j; Unicode character offsets [907:958] (end exclusive); SHA-256 8ceaded2a57e5b49e22a4766033c8899ebfd730667700a031b8db7f80ea91e32.

Routes and case patterns

Curated routes and observed case patterns
Route	Definition	Merits instance blocks	Distinct merits cases	Examples (up to 3 cases per count group)
purchase-price-inflation provisional; provisional (1 case)	Whether an inflated purchase price, without a price decline tied to the truth emerging, pleads loss causation (Dura).	1 Satisfied 0; not satisfied 1; excluded context 0	1	Dura Pharmaceuticals, Inc. v. Broudo — 544 U.S. 336 (2005) · Supreme Court of the United States · 2005 — not · pleaded (15usc78j: author: Astra2 · not independently reviewed) · applied/merits · counted Pattern: purchase-inflation/no-loss-link

How courts decided this element

Annotation blocks, including explicitly excluded context
Case	Element	Holding and scope	Pattern	Exact source quotations
Dura Pharmaceuticals, Inc. v. Broudo — 544 U.S. 336 (2005) · Supreme Court of the United States · 2005 — not · pleaded (15usc78j: author: Astra2 · not independently reviewed)	Causal connection between fraud and economic loss	not Counted merits instance applied / merits basis: pleaded; count: spray-device claim; subject: count=spray-device claim The large February decline concerned earnings/drug sales; the November spray-device disclosure was different. Neither purchase inflation alone nor the unrelated earnings decline pleads the necessary causal loss.	purchase-inflation/no-loss-link	(4) On the last day of the purchase period, February 24, 1998, Dura announced that its earnings would be lower than expected, principally due to slow drug sales. Id., at 51a. Source: `docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01`; Unicode character offsets [1710:1884] (end exclusive); SHA-256 `d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075`. Evidence kind: fact; polarity: cuts-against; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged) (5) The next day Dura’s shares lost almost half their value (falling from about $39 per share to about $21). Ibid. Source: `docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01`; Unicode character offsets [1885:1999] (end exclusive); SHA-256 `d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075`. Evidence kind: fact; polarity: cuts-against; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged) The complaint’s failure to claim that Dura’s share price fell significantly after the truth became known suggests that the plaintiffs considered the allegation of purchase price inflation alone sufficient. Source: `docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01`; Unicode character offsets [16237:16442] (end exclusive); SHA-256 `d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075`. Evidence kind: fact; polarity: cuts-against; absent flag: 1; quoted-rule flag: 0 (1 = tagged; 0 = not tagged) To “touch upon” a loss is not to cause a loss, and it is the latter that the law requires. Source: `docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01`; Unicode character offsets [8927:9017] (end exclusive); SHA-256 `d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075`. Evidence kind: rule; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged) And the complaint nowhere else provides the defendants with notice of what the relevant economic loss might be or of what the causal connection might be between that loss and the misrepresentation concerning Dura’s “spray device.” Source: `docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01`; Unicode character offsets [16634:16864] (end exclusive); SHA-256 `d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075`. Evidence kind: held; polarity: not recorded; absent flag: 0; quoted-rule flag: 0 (1 = tagged; 0 = not tagged)

Court interpretations

interpretation

To “touch upon” a loss is not to cause a loss, and it is the latter that the law requires.

Dura Pharmaceuticals, Inc. v. Broudo — 544 U.S. 336 (2005) · Supreme Court of the United States · 2005 (15usc78j: author: Astra2 · not independently reviewed)

To “touch upon” a loss is not to cause a loss, and it is the latter that the law requires.

Source: docroot/ir/caselaw/us_544.jsonl#/us/544/0336-01; Unicode character offsets [8927:9017] (end exclusive); SHA-256 d3babb1f78e697e8ce54ae719d486a42c4f4c9380530b739819d197987015075.