Defendants in securities fraud class actions may yet have a leg to stand on in defeating class certification, as demonstrated by the latest decision in the Halliburton saga. See Erica P. John Fund, Inc. v. Halliburton Co., No. 3:02-cv-1152, 2015 WL 4522863 (N.D. Tex. July 25, 2015). Last year, in “Halliburton II,” the Supreme Court resolved a circuit split and held that defendants in securities fraud class actions may present evidence at the class certification stage to attempt to rebut the presumption of classwide reliance on the alleged misrepresentations. Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398, 2417 (2014). The district court’s recent decision confirms that defeating the presumption of reliance (and thereby defeating class certification) is no mere theoretical possibility. The defendant actually did it in Halliburton, defeating class certification on five of the six alleged misrepresentations in the plaintiffs’ complaint.
What exactly does the district court’s decision mean, and why is it relevant? To answer these questions, it is important to go back to the beginning.
Read Full Article