In re Washington Public Power Supply System Securities Litigation

Washington Public Power Supply System (WPPSS) (defendant) sold bonds to fund nuclear power plant construction that was never completed, and WPPSS defaulted on the bond payments. Bond purchasers (plaintiffs) brought a class action under section 17(a) of the Securities Act of 1933, alleging the bonds were sold under false pretenses. The district court dismissed the claim; a panel of the court of appeals reversed based on existing circuit precedent recognizing a private right of action, and the full court then took the case en banc to decide whether that precedent should be overturned.