Firm Memoranda

SCOTUS Sticks to Basic[s] but Allows Defendants to Present Rebuttable Evidence at Class Certification Stage

Date: 06/25/14

On June 23, 2014, the Supreme Court issued its much-anticipated decision in Halliburton Co. v. Erica P. John Fund, Inc., holding that while plaintiffs can continue, in appropriate circumstances, to invoke the “fraud-on-the-market” presumption of reliance in securities fraud lawsuits, defendants will now have a meaningful opportunity to rebut the presumption at the class certification stage by demonstrating that the alleged misstatement(s) of which plaintiffs complain had no impact on the market price of a company’s stock. Halliburton must be read in conjunction with the Supreme Court’s decision in Dura Pharmaceuticals, Inc. v. Broudo, addressing loss causation and holding that plaintiffs bear the burden of showing that their losses were attributable to the revelation of the fraud and not other factors that affect a company’s stock price.

CGR Memo - SCOTUS Sticks to Basics but Allows Defendants to Present Rebuttable Evidence at Class Certification Stage.pdf (pdf | 143.65 KB )