Client Alert

In Narrowly Tailored Opinion, Supreme Court Finds Loss Causation Not Required at Class Certification Stage

June 13, 2011

The Securities Litigation and Enforcement Practice

Since the United States Supreme Courts 2005 holding in Dura Pharmaceuticals v. Broudo, 544 U.S. 336 (2005), legal minds have debated its scope, particularly whether loss causation must be proved by securities plaintiffs at the class certification stage. On June 6, 2011, the Court issued a narrow decision in Erica P. John Fund Inc. v. Halliburton, 09-1403, 2011 WL 2175208 (Halliburton), which directly addressed the issue. In a unanimous, but closely cabined opinion written by Chief Justice John Roberts, the Court reversed the decision of the Fifth Circuit, holding that securities plaintiffs need not prove loss causation at the class certification stage.

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