Clifford Chance

Supreme Court Hears Oral Arguments in Erica P. John Fund v. Halliburton

4 May 2011

On April 25, 2011, the US Supreme Court heard oral arguments in Erica P. John Fund v. Halliburton (No. 09-1403), a private securities fraud case that may have lasting impact on class action lawsuits in the United States. One of the key questions in the case is whether plaintiffs in a securities fraud class action can obtain class certification without showing that the defendant's alleged fraud actually impacted the price of the relevant security. This is an important question in securities class actions. More broadly, this question raises the issue of when the underlying merits of a claim may be considered at the class certification stage — an issue that applies in all class actions.

Halliburton is one of four class action cases before the Supreme Court this term, and one of two related to class certification (the other is Wal-Mart v. Dukes, (No. 10-277)). These cases promise to provide substantial guidance regarding the application of the rules for class certification.

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