In Re: DVI, Inc. Securities Litigation,

Following disclosure of misrepresentations and omissions concerning collateral, the company, which provides loans for purchase of medical equipment, sought bankruptcy protection. The district court certified a class of investors for litigation under the Securities Exchange Act, 15 U.S.C. 78j with respect to all but one defendant. The Third Circuit affirmed. Class certification requires that issues common to the class predominate over other issues; defendants argued that some "in-and-out" traders did not rely on the disclosures and did not have losses caused by the alleged omissions. The district court correctly examined the relationship between disclosures and security prices and applied a presumption of reliance so that plaintiffs were not required to prove causation at the certification stage. Denial of class certification with respect to a law firm defendant was proper because the presumption of reliance and causation does not apply; the allegedly deceptive conduct was not publicly attributable to the firm, which did not file the deceptive documents.