The Supreme Court Rejects Loss Causation Requirement at Class Certification Stage
Yesterday, in Erica P. John Fund, Inc. v. Halliburton Co., No. 09-1403, the Supreme Court unanimously held that private securities fraud plaintiffs do not need to prove loss causation in order to obtain class certification. The high court drew a firm line between two separate elements of a private securities fraud claim: (i) reliance on alleged misrepresentations or omissions, and (ii) loss causation. Halliburton, however, did not provide guidance on several related issues including the standard for use of expert testimony submitted at the class certification stage in securities and other cases, and how and when the presumption of reliance may be rebutted. Nor did the court signal how it may resolve the broader class action issues set to be decided this term, most prominently the host of issues presented in Wal-Mart Stores v. Dukes, No. 10-277.