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Archive for June, 2014

The U.S. Supreme Court issued its decision earlier today in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317 (Halliburton II), its most highly-anticipated class-action-related decision of the October 2013 term.  Those who were hoping for a sea-change in securities class action jurisprudence were left disappointed, as the Court, in an opinion authored by Chief Justice Roberts, declined to overrule its 25-year-old decision in Basic Inc. v. Levinson, 485 U.S. 224 (1988).  Rather than abolish the framework established in Basic, which provides a means for securities fraud plaintiffs to satisfy the elements of class certification through a class-wide presumption of reliance on material misrepresentations, the Court instead held that a defendant can rebut the presumption by demonstrating, at the class certification stage, that the alleged misrepresentations did not actually have any impact on the stock price.  In doing so, the Court reversed the Fifth Circuit Court of Appeals’ decision barring the defendant from offering evidence of non-impact on stock price at the class certification stage.

The Court distinguished its earlier decision in the same case, Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___ (2011) (Halliburton I), in which it held that a plaintiff should not be required to prove materiality of the alleged misrepresentation at the class certification stage.  The distinction between the issue of materiality of a misrepresentation (a merits issue not appropriate for the class certification phase according to Halliburton I), and the issue of whether a misrepresentation actually had a common price impact on the stock (a proper class certification question according to Halliburton II) is the key to making sense of the Court’s decision today.  As Justice Roberts stated:

[P]rice impact differs from materiality in a crucial respect. Given that the other Basic prerequisites must still be proved at the class certification stage, the common issue of materiality can be left to the merits stage without risking the certification of classes in which individual issues will end up overwhelming common ones. And because materiality is a discrete issue that can be resolved in isolation from the other prerequisites, it can be wholly confined to the merits stage.

Price impact is different. The fact that a misrepresentation “was reflected in the market price at the time of [the]transaction”—that it had price impact—is “Basic’s fundamental premise.” Halliburton I, 563 U. S., at ___ (slip op., at 7). It thus has everything to do with the issue of predominance at the class certification stage. That is why, if reliance is to be shown through the Basic presumption,the publicity and market efficiency prerequisites must be proved before class certification. Without proof of those prerequisites, the fraud-on-the-market theory underlying the presumption completely collapses, rendering class certification inappropriate.

Halliburton II, slip op., at 21-22.  In other words, a merits question that is indisputedly common to the class should not be considered prior to class certification, but a merits question that also bears on whether the issues to be resolved at trial are truly common or individualized in the first place must be considered as part of the class certification decision.

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It’s not too late to register for this Thursday’s CLE program at the University of San Francisco.  See the particulars below.

CLICK HERE FOR MORE INFORMATION AND TO REGISTER

Who’s in Charge Here?: The Role of Lawyers, Clients, Insurers, and Judges in Class Actions and Mass Tort Litigation

Presented by the Class Actions and Derivatives Suits, Consumer Litigation, and Mass Torts Committees

Thursday, June 19, 2014, 12:00pm – 7:00pm

University of San Francisco Law School, San Francisco, CA

FREE PARKING AND 2 ETHICS CREDITS!!

The Gulf Oil Spill, the 9-11 terrorist attacks, massive product recalls and credit card data breaches—these and other large-scale conflicts generate correspondingly massive litigation, requiring courts, parties, attorneys, and insurers to adapt to increasingly complex challenges.  For this half-day CLE event, we have assembled a distinguished group of judges, academics, mediators, and counsel to discuss some of the most pressing issues facing the various stakeholders.

Our all-star panels will explore ethical and other standards for selecting and evaluating named class representatives; coverage and other current issues surrounding consumer data breach class actions; the balancing of individual plaintiffs’ interests in settlement of mass tort cases; and cutting-edge case management techniques gleaned for among the most tragic mass disasters of our time—the 9-11 attacks and the Gulf Oil Spill.

We are pleased to feature the Hon. Alvin Hellerstein, U.S. District Court for the S.D. of New York—who presided over the 9-11 cases; the Hon. Jon Tigar of the U.S. District Court for the N.D. of California; Tara Kelly, inside counsel at British Petroleum (Houston); Prof. Deborah Hensler of Stanford Law School; Assoc. Dean Joshua Davis of the University of San Francisco School of Law; Thomas Kang at the ACE Group (Los Angeles); and Jocelyn Larkin, Executive Director of the Impact Fund (Berkley), among our distinguished panelists.  Lunch will be provided, and the program will be followed by a sponsored cocktail hour, providing ample opportunities for networking.  Come join us for an enlightening afternoon!

Program Highlights:

  • Whose Class Is It Anyway? –The Policy, Practice, and Ethics Behind the Search for Named Plaintiffs (Ethics CLE Credit Applied for)
  • Recent Developments in Data Privacy Class Actions and Insurance Coverage
  • It’s The Trees Not the Forest – Considering Individual Interests in Mass Torts Settlements
  • Judicial Quasi-Class Actions – Managing MDL and mass tort litigation through judicial control over the appointment of lead counsel, attorneys’ fees, and cost-shifting

Faculty:

  • Hon Alvin K. Hellerstein, U.S. District Court of the Southern District of New York
  • Hon Jon S. Tigar, U.S. District Court for the Northern District of California
  • Professor Joshua Davis, University of San Francisco Law School
  • Professor Deborah Hensler, Stanford University Law School
  • Tara Kelly, British Petroleum, Houston, Texas
  • Thomas Kang, ACE North American Professional Risk, Los Angeles
  • Catherine Yanni, JAMS, San Francisco
  • Jocelyn Larkin, Impact Fund, San Francisco
  • Sheila Birnbaum, Quinn Emanuel Urquhart & Sullivan, New York, New York
  • Paul Karlsgodt, BakerHostetler, Denver, Colorado (Program Co-Chair)
  • Linda D. Kornfeld, Kasowitz, Benson, Torres & Friedman LLP, Los Angeles
  • Karen Menzies, Robinson Calcagnie Robinson Shapiro Davis, Newport Beach
  • Andrew McGuinness, Ann Arbor, Michigan (Program Co-Chair)
  • Rudy Perrino, Walsworth Franklin Bevins & McCall, Los Angeles
  • Rosemarie Ring, Munger, Tolles & Olson LLP, San Francisco
  • Christina Terplan, Clyde & Co., San Francisco
  • Timothy Tomasik, Tomasik Kotin Kasserman, Chicago, Illinois
  • Donna L. Wilson, Manatt, Phelps & Phillips, Los Angeles

Thanks to our Platinum Sponsors!

  • University of San Francisco School of Law
  • Heffler Claims Group
  • Gilardi & Co. LLC
  • Brown Claims Management Group
  • Garden City Group
  • Munger, Tolles & Olson LLP

Gold Sponsors

  • BakerHostetler
  • Clyde & Co.

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