July 12, 2016

Circuits Wrangle With Halliburton

The Supreme Court's 2014 Halliburton II ruling allowed defendants the right at the class certification stage to rebut the bedrock presumption of securities class actions by showing that an alleged misstatement didn't affect a company's share price, but the issue is far from closed as circuit courts continue to grapple with the aftermath.

In response to this issue, Cohen Milstein's Daniel Sommers said plaintiffs attorneys are paying particular attention to whether Halliburton II can be satisfied by showing that an alleged misstatement maintained a price rather than caused an affirmative price impact, a question at the heart of several of the appeals.

"That's obviously a significant issue in securities litigation and certainly an important one from the plaintiffs' perspective." 

Third Circuit Takes On American Pipe Tolling

Institutional investors in particular are paying close attention to the Third Circuit this year, as the appellate court considers whether the so-called American Pipe tolling standard preserves a group of institutional funds' misrepresentation claims over Merck & Co. Inc.'s anti-cholesterol agent Vytorin.

Mr. Sommers said the issue is particularly important for institutional investors because, if the circuit court rules that American Pipe doesn't apply to toll the statutes of repose in securities class actions, large investors will be forced to actively monitor "hundreds and hundreds of actions" in order to be able to step in and protect their rights.

"They're going to be forced to spend significant time and resources to do this, and in a lot of circumstances, they're going to be forced either to file their own claim or to intervene in cases in circumstances where they otherwise would not have to do that."

The full article can be read here