When the U.S. Supreme Court granted the petition for a writ of certiorari to take up class certification questions raised in the long-running Goldman Sachs securities class action lawsuit, some commentators thought the case might give the Court the opportunity to reconsider fundamental issues about the presumption of reliance under the “fraud on the market” theory in connection with class certification in securities suits. However, as the case has turned out, the Court’s consideration of the case has not produced any fundamental recasting of any key issues; instead, the Court on June 21, 2021 issued a narrow decision that the majority opinion itself acknowledged, with respect to the most significant substantive part of the Court’s opinion, will not be “outcome determinative” in many cases. The Court’s June 21, 2021 decision can be found here.
Continue Reading Supreme Court Vacates Class Certification in Goldman Sachs Securities Suit on Narrow Grounds
Morrison Issues Cloud Class Certification in Petrobras Securities Litigation
Since the U.S. Supreme Court’s June 2010 decision in Morrison v. National Australia Bank, the lower courts have wrestled with the issue of whether or not the transactions at issue in a particular securities suit were sufficiently “domestic” to bring them under the U.S. securities laws. These inquiries mostly have taken place at the motion to dismiss phase. However, as demonstrated in the Second Circuit’s July 7, 2017 decision in the Petrobras securities case, the “domestic” transactions inquiry is relevant at the class certification stage as well. The appellate court held that in determining whether or not Petrobras noteholders’ claims can proceed on a class-wide basis, the district court must, in light of the federal class action procedure’s “predominance” requirement, determine whether or not common questions outweigh individual questions of transactional domesticity. The appellate court’s ruling, which can be found here, could complicate class certification in cases involving non-U.S. companies whose securities do not trade on U.S. exchanges.
Continue Reading Morrison Issues Cloud Class Certification in Petrobras Securities Litigation
Guest Post: Eight Circuit: Under Halliburton II, Defendants Successfully Rebut Fraud-on-the Market Presumption
In its June 2014 decision in Halliburton Co. v. Erica P. John Fund, Inc., the U.S. Supreme Court held, among other things, that in order to try to rebut the fraud-on-the-market presumption in order to defeat class certification, defendants can contend that the allegedly corrective disclosure did not impact the defendants company’s share price. In an April 12, 2016 decision in IBEW Local 98 Pension Fund v. Best Buy Co., Inc., the Eight Circuit, applying Halliburton, held that the defendants had successfully rebutted the presumption in the case by demonstrating absence of price impact. In the following guest post, attorneys from the Paul Weiss law firm takes a look at the Eighth Circuit’s decision and considers its significance. I would like to thank the attorneys from the Paul Weiss firm for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Eight Circuit: Under Halliburton II, Defendants Successfully Rebut Fraud-on-the Market Presumption
Guest Post: Halliburton: Procedures and Percentages Part II—Should We Expect Any Changes Following the Supreme Court’s Ruling?
Following the U.S. Supreme Court’s ruling earlier this week in the Halliburton case, questions have continued to swirl about the implications of the court’s decision. In the following guest post, Jennifer Spaziano of the Skadden law firm, takes a look at the impact the Halliburton decision will have on securities class action procedures, outcomes and
Halliburton: U.S. Supreme Court Declines to Overturn Basic, Allows Defendants to Rebut Presumption of Reliance
On June 23, 2014, the U.S. Supreme Court released its long-awaited decision in Halliburton Co. v. Erica P. John Fund, in which the Court had taken up the question whether or not to set aside the presumption of reliance based on the fraud on the market theory that the Court first recognized in its
Some Things to Think About While We Await the Supreme Court’s Decision in Halliburton
The U.S Supreme Court did not issue its long-awaited decision in the Halliburton case yesterday and so it looks as if we will have to wait a little while longer to find out whether or not the Court will throw out the fraud on the market theory. The Court will for sure release its opinion
Guest Post: Halliburton: Procedures and Percentages—Why Did the Court Care and What Do They Mean?
The Halliburton case now before the U.S. Supreme Court could potentially change the securities class action litigation landscape in the United States, as the Court considers whether or not to dump the fraud on the market theory. However, based upon the oral argument in the case on Wednesday, March 5, 2014, it appears that the
U.S. Supreme Court Hears Oral Argument in the Halliburton Case
On Wednesday March 5, 2014, the U.S. Supreme Court heard oral argument in the closely watched Halliburton case, which, as discussed at length here, potentially could change the face of securities litigation. At issue is whether or not the Court will set aside the “fraud on the market” presumption of reliance at the class
Even if Fraud on the Market is Dumped, Don’t Cut Back on D&O Insurance
It is hard to prognosticate the outcome of the Halliburton case now before the U.S. Supreme Court. But while we can’t be sure what the outcome will be, we can start to think about what will happen if the Supreme Court overturns Basic. In an interesting February 7, 2014 post on the Harvard Law School
Arguments to Keep the Fraud on Market Theory, and Thinking About a World Without It
As the March 5, 2014 date for oral argument before the United States Supreme Court in the closely-watched Halliburton case approaches, the briefing process in the case has continued to unfold. On January 29, 2014, the Erica P. John Fund, the respondent (the plaintiff in the underlying action) filed its merits brief in the case,