In Lowry v. Baltimore & Ohio Railroad, 1 the United States Court of Appeals for the Third Circuit considered whether the owner of a security may assert his seller\u27s section 10(b) cause of action if the current owner did not receive an express assignment of the seller\u27s rights. 2 That is, if the seller of a security has a section 10(b) claim, does the seller\u27s cause of action run with the security so that the seller\u27s purchaser takes the seller\u27s cause of action by automatic assignment, or must the purchaser secure an express assignment of the seller\u27s cause of action in order for the purchaser to sue the party who defrauded the seller? This note addresses the issue whether a section 10(b) cause of action should run with the security where existence of the cause of action has become a matter of public knowledge. The note first reviews the law of assignments of causes of action in general, 3 and then summarizes three possible resolutions of the issue: adopting a rule of automatic assignments, 4 inferring the parties\u27 intent from the facts, 5 and requiring an expression of the parties\u27 intent. 6 In discussing these three resolutions, the note evaluates the various arguments expressed in Lowry, 7 the consistency of each argument with the law of assignments 8 and with federal securities law, 9 and the ramifications of each argument for maintaining class actions. 10 The note concludes that an express assignment of the seller\u27s cause of ..
