Court to decide if company can try to block suit

Nov 15, 2013, 8:27 PM

WASHINGTON (AP) – The Supreme Court decided Friday to hear an appeal from Halliburton Co. that could make it more difficult for shareholders to sue companies for engaging in fraud to prop up stock prices.

The high court agreed to hear the corporation’s attempt to stop legal action from shareholders who bought stock between June 1999 and December 2001.

Their lawsuit argues that Halliburton deliberately understated the company’s liability in asbestos litigation, inflated how much money its construction and engineering units would bring in and overstated the benefits of a merger with Dresser Industries. When Halliburton made corrective disclosures, it made the stock price drop and caused investors to lose money, the lawsuit said.

This is the second time this case has been to the Supreme Court.

The 5th U.S. Circuit Court of Appeals in New Orleans originally refused to let the lawsuit go forward as a class-action. But the Supreme Court said in 2011 that ruling was incorrect, and the lawsuit was certified as a class-action suit by the lower courts.

Now Halliburton lawyers want the Supreme Court to throw out its 1988 decision in Basic v. Levinson, which the shareholders’ lawyers call “the cornerstone for modern private securities litigation.” That decision says shareholders do not have to prove they relied on a company’s misrepresentation in order to obtain class certification, meaning that judges can assume that misrepresentations by corporations were taken into account by shareholders when they bought the stock.

Halliburton lawyers say that should be overruled or modified to say that plaintiffs have to prove that the alleged misrepresentations distorted the stock’s market price. A decision upholding that theory would make it harder for shareholders to band together in class action lawsuits to sue corporations in securities lawsuits.

Four justices, Clarence Thomas, Samuel Alito, Anthony Kennedy and Antonin Scalia, have said they were willing to reconsider the Basic decision.

The court will hear the case next year.

___

The case is Halliburton v. Erica P. John Fund Inc., 13-317.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Uncategorized

...
Promotions

Dead & Company – The Final Tour

Dead & Company - The Final Tour will be at Talking Stick Resort Amphitheatre on May 23. Register now for your chance to win tickets!!
1 month ago
Danny Shapiro

Who is running in 2022 related links

Testing. Follow @DannyShapiro13
2 months ago
Tyler Bassett

2022 Post-Election relateds

Follow @Tyler_Bassett
3 months ago
Kevin Stone

2022 general election relateds

Testing. Follow @kstonezone
3 months ago
Stephanie Terrell, a Portland, Ore., renter who owns a used electric car, charges it at a public ch...
Associated Press

Correction: Electric Vehicles-Urban Living story

PORTLAND, Ore. (AP) — In a story published October 25, 2022, about electric vehicle chargers, The Associated Press erroneously reported the number of commercial chargers — ones not in private homes — that are publicly accessible in Los Angeles. There are 4,367, not about 3,000. Copyright © The Associated Press. All rights reserved. This material […]
3 months ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
...
Fiesta Bowl Foundation

Celebrate 50 years of Vrbo Fiesta Bowl Parade magic!

Since its first production in the early 1970s, the Vrbo Fiesta Bowl Parade presented by Lerner & Rowe has been a staple of Valley traditions, bringing family fun and excitement to downtown Phoenix.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
Court to decide if company can try to block suit