• The Supreme Court Issues a Narrow Ruling in Halliburton
  • June 10, 2011 | Author: Susan E. Hurd
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • On June 6, 2011, the Supreme Court delivered its unanimous opinion in Erica P. John Fund, Inc. v. Halliburton Co. Prior to accepting the Halliburton appeal, the Court had agreed to hear only one prior appeal related to what is known as the “loss causation” requirement for claims brought under Section 10(b) of the Securities Exchange Act of 1934.2 The loss causation requirement has become an increasingly important factor in whether shareholders will be able to recover on claims brought under the federal securities laws. Under the loss causation requirement, a plaintiff must plead and prove that any stock price losses were caused by the defendants’ alleged misstatements and not by other factors, such as changed economic circumstances and industry-specific events. By accepting the Halliburton appeal, the Court had the opportunity to provide helpful guidance to the lower courts and litigants on what type of evidence would be sufficient to establish loss causation.