Halliburton Co. and David Lesar v. Erica P. John Fund, Inc., FKA Archdiocese of Milwaukee Supporting Fund, Inc.

Term: 2013 Term
Oral Argument Date: March 05, 2014
Vote: Awaiting Decision
Lower Court: United States Court of Appeals for the Fifth Circuit

Question(s) Presented

1. Whether this Court should overrule or substantially modify the holding of Basic Inc. v. Levinson, 485 U.S. 224 (1988), to the extent that it recognizes a presumption of classwide reliance derived from the fraud-on-themarket theory.

2. Whether, in a case where the plaintiff invokes the presumption of reliance to seek class certification, the defendant may rebut the presumption and prevent class certification by introducing evidence that the alleged misrepresentations did not distort the market price of its stock.

NCLC's Position

In its brief, the U.S. Chamber and other business groups urged the U.S. Supreme Court to overrule or modify the fraud-on-the-market theory endorsed by Basic Inc. v. Levinson, 485 U.S. 224 (1988). This theory allows plaintiffs to establish the reliance element in a securities fraud class action merely by showing that they traded stock around the time of the public misrepresentations. In other words, the Court created a shortcut to make it very easy to certify securities class action. This approach has led to confusion among the lower courts, enabled a wave of class action litigation, and "inflicted tremendous costs on public companies and their shareholders without producing corresponding benefits to investors." 

Previously, the Chamber filed an amicus brief asking the U.S. Supreme Court to grant the certiorari petition.

Steven G. Bradbury and C.B. Buente of Dechert LLP represented the U.S. Chamber of Comerece at both the Certiorari and Merits stage as co-counsel to the Natinoal Chamber Litigation Center.

Case Outcome

This case has not yet been decided.

Procedural History
Case Documents