Supreme Court ruling may make it harder for shareholders to file class action suits

In the next several weeks, the Supreme Court is expected to rule on a case involving a shareholders' class action lawsuit against Haliburton (HAL). If it rules in favor of the company, it will set a higher bar for plaintiffs to achieve class certification. Currently, a judge holds a certification hearing to decide whether class status is appropriate. One criterion is that the people must have common issues. If HAL prevails,  then the defendants will be able to file a brief with the court demanding that the shareholders have to again seek court approval for class status under a new, tougher standard. If they fail the gain the approval, the case ends.

HAL is trying to overturn a 1988 decision, Basic v. Levinson, which is based on "fraud on the market theory," which postulates that a defendant's material misrepresentation that affects the price of publicly traded securities is assumed to have been relied upon by a buyer who suffered a loss. In HAL's case, shareholders alleged that it understated its asbestos liabilities while overstating revenues and the benefits of its merger with Dresser Industries.

Other firms facing class action suits that would benefit from a favorable ruling are Pfizer (PFE), Merck (MRK), HSBC Holdings Plc (HSBC), Regions Financial (RF) and Las Vegas Sands (LVS).

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Comments (5)
  • duhaus
    , contributor
    Comments (320) | Send Message
    Haliburton ? If it goes in their favor be sure that Cheney's criminal hands were in the outcome.
    12 Jun 2014, 11:23 AM Reply Like
  • CCCB
    , contributor
    Comments (108) | Send Message
    Cheney doesn't own HAL was CEO. Now LBJ wife did own HAL during Vietnam war made lots of money. Who more criminal that LBJ. Of course I know it's an inconvenient truth. You do know who LBJ was.
    As Hilary said "what difference those it make" right!
    12 Jun 2014, 12:47 PM Reply Like
  • minwyhe
    , contributor
    Comments (115) | Send Message
    With our ultra conservative Supreme Court how else do you expect them to rule but in favor of HAL. I did not realize our constitution ever governed commerce, but according to these nimwits it apparently does. Like to see on what basis this judgement is made.
    12 Jun 2014, 02:37 PM Reply Like
  • User 13917152
    , contributor
    Comment (1) | Send Message
    "I did not realize our constitution ever governed commerce"
    Wow! doesn't govern commerce?!!
    So You Never heard of Interstate commerce commision, EPA, FCC, FDA, FAA, ETC. ETC.
    12 Jun 2014, 06:52 PM Reply Like
  • minwyhe
    , contributor
    Comments (115) | Send Message
    These organizations you referred to have nothing to do with the Constitution on which a decision of the Supreme 9 (ha ha not so supreme) Court should be basing its opinions.
    13 Jun 2014, 10:33 AM Reply Like
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