Lower Court Decisions in the Wake of Halliburton II by Maeve L. O

Vol. 48 No. 4
February 18, 2015
LOWER COURT DECISIONS
IN THE WAKE OF HALLIBURTON II
Following the Supreme Court’s second Halliburton decision, defendants in securities
class actions have begun to offer evidence at the class certification stage of a lack of
price effect arising from the alleged misrepresentations. In the five-district court cases
decided thus far, no defendant has successfully rebutted the presumption of reliance with
such evidence. The authors analyze the cases, addressing evidentiary issues
surrounding the burden of proof, price increase versus price impact, and the relation of
price impact to loss causation.
By Maeve L. O’Connor and Elliot Greenfield *
If the private securities defense bar did not get the
“home run” it had hoped for in the United States
Supreme Court’s decision in Halliburton v. Erica P.
John Fund (“Halliburton II”),1 the consensus view was
that it at least walked away with a respectable single.
While declining to do away with the presumption of
reliance securities plaintiffs may invoke in an efficient
market, the Court did give defendants the opportunity to
rebut that presumption at the class certification stage.2
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1
134 S. Ct. 2398 (2014).
2
The ability to introduce price impact evidence at the class
certification stage had already been recognized in the Second
and Third Circuits. See In re Salomon Analyst Metromedia
Litig., 544 F.3d 474, 483-84 (2d Cir. 2008), abrogated on other
grounds by Amgen Inc. v. Connecticut Ret. Plans & Trust
Funds, 133 S. Ct. 1184 (2013); In re DVI, Inc. Sec. Litig., 639
F.3d 623, 638 (3d Cir. 2011), abrogated on other grounds by
Amgen, 133 S. Ct. 1184.
However, in the five district court decisions decided as
of the date of this article in the post-Halliburton II era,
no defendant has successfully rebutted the presumption.3
While defendants may not always have a strong basis
to argue that the statements at issue did not impact the
company’s stock price, the results in cases to date appear
to be due, at least in part, to that fact that the Supreme
Court offered little practical guidance as to how its
holding should be applied. What evidence might suffice
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3
Aranaz v. Catalyst Pharmaceutical Partners, Inc., 302 F.R.D.
657 (S.D. Fla. 2014); IBEW Local 98 Pension Fund v. Best Buy
Co., Inc., 2014 WL 4746195 (D. Minn. Aug. 6, 2014); Local
703, I.B. of T. Grocery and Food Employees Welfare Fund v.
Regions Financial Corp., 2014 WL 6661918 (N.D. Ala.
Nov. 19, 2014); McIntire v. China MediaExpress Holdings, Inc.,
2014 WL 4049896 (S.D.N.Y. Aug. 15, 2014); Wallace v.
IntraLinks, 302 F.R.D. 310 (S.D.N.Y. 2014).
 MAEVE L. O’CONNOR is a partner and ELLIOT
IN THIS ISSUE
GREENFIELD is an associate in the litigation department of
Debevoise & Plimpton LLP. Their e-mail addresses are
mloconnor@debevoise.com and egreenfield@debevoise.com.
● LOWER COURT DECISIONS IN THE WAKE OF
HALLIBURTON II
February 18, 2015
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