Applying the Supreme Court’s landmark decision in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (“Halliburton II”), which allowed companies facing securities fraud class actions to defeat certification by presenting evidence that their alleged false statements did not impact the company’s stock price, the district court on remand held that Halliburton defeated class certification as to all but one of its alleged misstatements. The district court considered expert testimony from both parties before determining that only one of the statements at issue ultimately impacted the price of Halliburton’s stock.
The July 25, 2015 decision by Judge Barbara M. G. Lynn for the Northern District of Texas is the latest chapter in a “long and winding” case that has visited the Supreme Court twice. The Erica P. John Fund, Inc. v. Halliburton Co., No. 2:02-CV-1152-M (N.D. Tex. July 25, 2015). The Erica P. John Fund, Inc. (the “Fund”), is the lead plaintiff in a putative class action against Halliburton alleging violations of the federal securities laws— specifically, that Halliburton made various representations as to the company’s financial status that later turned out to be false, precipitating a massive stock drop.
In 2008, the district court denied class certification after finding that, per binding Fifth Circuit precedent, the plaintiff had not proven that Halliburton’s alleged misstatements had caused the plaintiff’s loss. The Supreme Court later reversed and remanded, holding that so-called loss causation need not be proven at the class certification stage, but rather should be dealt with on the merits. Erica P. John Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179, 2185-86 (2011) (“Halliburton I”). Read more >>