U.S. Supreme Court Provides More Room To Challenge Certification Of Disclosure Class Actions

Decision in Erica P. John Fund, Inc. v. Halliburton Permits Defendants in Disclosure Class Actions to Tender Evidence of Price Impact at Class Certification Stage

On June 23, 2014, the U.S. Supreme Court released its decision in Erica P. John Fund, Inc. v. Halliburton (Halliburton). While the Court declined to dramatically change the law with respect to securities disclosure class actions, the Court held that defendants at the certification stage are entitled to tender evidence that alleged misrepresentations in disclosure did not affect the price of securities, which may defeat certification where that evidence is accepted. This decision overturned a ruling of the Fifth Circuit that such evidence should not be considered at the class certification stage.