The Enron-related caseload just got a lot lighter.

The Supreme Court ruled today that investors cannot sue third party businesses, such as law firms, accountants, banks, and other suppliers, for their role in public companies' deceptive practices to inflate stock prices.

Investor advocates and corporate constituencies have been eagerly awaiting the Court's decision on Stoneridge Investment Partners v. Scientific-Atlanta, because its implications are far-reaching. It is widely viewed as the most important business case to come before the Supreme Court in years.

In the case, Scientific-Atlanta and Motorola, which were suppliers for cable giant Charter Communications, were sued for helping to inflate Charter's stock price by agreeing to collude on prices. The 5-3 ruling, which was written by Justice Anthony Kennedy, said that investors cannot sue the suppliers because they did not rely on their statements or misrepresentations when choosing to buy the stock.

"Unconventional as the arrangement was, it took place in the marketplace for goods and services, not in the investment sphere," Kennedy wrote. "Charter was free to do as it chose in preparing its books, conferring with its auditor, and preparing and then issuing its financial statements."

Justices Stevens, Souter and Ginsberg dissented. Justice Breyer withheld his vote.

The ruling is a great setback for investors in many corporate fraud cases. For instance, in the Enron case investors had hoped to seek retribution from investment banks like Merrill Lynch for advising the company on its fraudulent deals.

Intense lobbying activity preceded today's ruling. The Bush administration came down on the side of the business lobby, despite the fact that the Securities and Exchange Commission had urged it to file an amicus brief in favor of investors.

Perhaps anticipating the outrage from investor advocates as a result of this ruling, Justice Kennedy seems to assert that this decision does not make third parties immune from the law. "The enforcement power is not toothless," he writes. "Since September 30, 2002, S.E.C. enforcement actions have collected over $10 billion in disgorgement and penalties, much of it for distribution to injured investors."

Moreover, he writes, investors can still sue accountants and underwriters under certain circumstances.