The U.S. Supreme Court on Monday ruled that investors are not
required to prove that corporate misstatements caused their
investment losses in order to win class certification, dealing a
blow to Halliburton Co. in a shareholder suit.
In a unanimous decision, the high court found that the Fifth
Circuit wrongly held that the Erica P. John Fund Inc. was required
to prove that misstatements by Halliburton caused it to lose money
on its investment with the energy giant. Rather, the plaintiffs
merely had to prove that they made their investments in company
stock based on false statements made by Halliburton
The Fifth Circuit's ruling would have effectively stopped the
lion's share of securities class action litigation had it been
allowed to stand, said David Boies, chairman of Boies Schiller
& Flexner LLP.
"As the Supreme Court's opinion makes clear, it is important to
weed out weak or abusive securities class actions, but it is
equally important that valid class actions be permitted to
proceed," he said. "This is a victory for effective enforcement of
public securities laws, and for individuals and institutions that
are injured by securities fraud."
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Berger & Montague filed an amicus brief in the U.S. Supreme
Court which argued the opinion subsequently adopted by the
The brief was written on behalf of the Public Justice Foundation
by Berger & Montague, with assistance from Yael R. May.
Additional assistance was provided by Public Justice Attorneys
Melanie Hirsch, Paul Bland, and Executive Director Arthur Bryant,
as well as Lisa M. Mezzetti and S. Douglas Bunch of Cohen Milstein
Sellers & Toll PLLC.
View the amicus brief