Eleventh Circuit Loosens Loss Causation in High-Profile Election-Interference Securities Suit

On November 26, 2025, the Eleventh Circuit reversed Judge Aileen Cannon’s dismissal in Jastram v. NextEra Energy, Inc. in a decision that appears to significantly broaden the Circuit’s loss causation standard at the motion-to-dismiss stage.

The case arises from allegations that NextEra Energy and its subsidiary, Florida Power & Light (FPL), made misleading statements denying its involvement in, and legal exposure to, a “Florida-election interference scheme.” Salacious details abound, with plaintiffs alleging a scheme involving the covert funding of “ghost candidates,” attempted bribery of local officials, off-the-books payments routed through shell nonprofits, the hiring of private investigators to surveil journalists, and secret payments for securing “executive control” over ostensibly independent news outlets in Jacksonville.[1] Unequivocally and emphatically, NextEra and FPL denied all allegations over the course of 2021 and 2022. Executives assured investors there was “absolutely no evidence” of any wrongdoing.[2]

In January 2023, however, NextEra filed two Form 8-Ks that announced the imposition of “material fines” and “material adverse impact on the reputation” of NextEra and FPL given the potential investigations, referencing allegations of election misconduct and a Federal Election Commission complaint. Following those disclosures, NextEra’s stock decreased nearly nine percent, and a securities class action followed.

The district court, applying the Eleventh Circuit’s loss causation standard in Meyer v. Greene, found that the plaintiffs had “failed to identify a corrective disclosure that reveals a truth that was previously concealed or obscured by” the alleged fraud. In Meyer, the Eleventh Circuit held that neither an analyst’s synthesis of public information nor the disclosure of an SEC investigation qualified as a corrective disclosure because it did not state the “falsity of [the] company’s prior representations.”[3] The Eleventh Circuit applied Meyer in 2023 in MacPhee v. MiMedx Group, Inc., rejecting the plaintiffs’ attempt to demonstrate loss causation through SEC whistleblower and investigation disclosures because those disclosures simply “portend[ed] an added risk of future corrective action” rather than revealed any “pertinent truth.”[4] Based on this precedent, the district court found that none of the January 2023 disclosures could qualify as a corrective disclosure because none purported to correct the prior alleged misstatements or suggest that the prior statements were false or fraudulent.

The Eleventh Circuit reversed, holding that the district court had imposed too narrow an evaluation of the January 2023 disclosures. The “proper inquiry,” it held, is “whether enough truth has saturated the market to make investors second-guess the earlier fraud.”[5] Notably, the Court did not inquire whether the company issued a stand-alone confession or fact-for-fact retraction of its prior statements. This emphasis on economic reality over semantic labeling signaled a shift that, in application, proved decisive.

Employing their new standard, the Eleventh Circuit pointed to three company statements that, when viewed collectively, amounted to a corrective disclosure. First, NextEra filed an unscheduled Form 8-K disclosing material litigation and reputational risks related to election law violations. This was certainly not an admission. But the Court described it as “a notably different tune” than previous categorical denials. Second, on the same day, NextEra disclosed its abrupt “separation” from CEO Eric Silagy, the alleged architect of the misconduct.[6] While the company claimed it was unrelated, the Court pointed to investment analyst commentary that “investors weren’t buying it.”[7] Finally, days later, media reports revealed Silagy’s severance agreement included a claw-back provision triggered by a felony conviction or admission. NextEra allegedly acknowledged that this provision was not “customary.”[8]

Critically, the Eleventh Circuit rejected the district court’s insistence on uncovering a fact that refutes “the specific misrepresentations alleged”[9] and previous district court implementations that required a disclosure to be an “essential link” in the loss causation chain.[10] Instead, it held that courts must assess the cumulative market impact of related disclosures. As the Court put it, “investors do not need handholding” to infer that a sudden risk disclosure, unexpected ouster, and unique severance claw-back provision undermine prior assurances of innocence.[11]

The Eleventh Circuit’s decision reflects a recalibration of its precedent, focusing less on the literal causal link between alleged misstatement and corrective disclosure, and instead a market-based, probabilistic inquiry in its “enough truth to saturate the market” test. Notably, in its decision, the court considered the plaintiffs’ assertion that “an abundance of statements by financial analysts” linked NextEra’s January disclosures to the political scandal.[12] This inquiry, at minimum, may allow plaintiffs to attempt to more creatively try to plead loss causation by alleging that a variety of reports and disclosures may signal a “truth” about allegedly fraudulent or misleading statements, even where there appears to be no connection on the face of the disclosures. Indeed, NextEra is seeking an en banc hearing, arguing that the decision “dramatically broaden[s]” the Court’s loss causation standard and alleging that under it, “[l]osses caused solely by market speculation—untethered to any allegedly misrepresented facts”[13] can sustain a securities fraud complaint. In the meantime, the Jastram decision may create new challenges for defendants seeking dismissal from securities fraud class actions in the Eleventh Circuit.

[1] Jastram v. NextEra Energy, Inc. (Jastram II), 161 F.4th 693, 700–705 (11th Cir. 2025).

[2] Jastram v. NextEra Energy, Inc. (Jastram I), No. 23-80833-CIV, 2024 WL 6914830, at *2 (S.D. Fla. Sep. 27, 2024).

[3] Meyer v. Greene, 710 F.3d 1189, 1199 (11th Cir. 2013).

[4] MacPhee v. MiMedx Grp, Inc., 73 F.4th 1220, 1247 (11th Cir. 2023).

[5] Jastram II, 161 F.4th at 709 (emphasis added).

[6] Jastram II, 161 F.4th at 711.

[7] Jastram II, 161 F.4th at 712.

[8] Id. at 712.

[9] Jastram I, 2024 WL 6914830 at *8.

[10] McDowell v. Bracken, 317 F.Supp. 3d 1162, 1181 (S.D. Fla. 2018) (granting a motion to dismiss because “the reelection of directors was not an essential link to the supposed losses that Plaintiff complains of”).

[11] Jastram II, at 709.

[12] Id. at 712–713.

[13] Appellee’s Pet. For Reh’g at 1. Jastram v. NextEra Energy, Inc., 161 F.4th 693 (11th Cir. 2025).

Associate Ava Gruener also contributed to this article.

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