Price Impact: The Battle of Experts and Burden of Proof after Halliburton II

When the Supreme Court issued its decision in Halliburton II last December, it answered the question of whether a defendant may present evidence at the class certification stage that alleged misstatements did not impact the company’s stock price. The Court answered this question in the affirmative, but left open other questions regarding how lower courts should implement its holding. We are now getting our first glimpse at how district courts are resolving the questions left open by the Supreme Court. On remand, the Halliburton district court issued its first ruling in response to Halliburton II. The Erica P. John Fund, Inc. v. Halliburton Co., No. 3:02-CV-1152-M, 2015 WL 4522863 (N.D. Tex. July 25, 2015).After considering detailed testimony by both parties’ experts, and placing the burden on Halliburton to prove a lack of price impact, the district court certified a class as to one of the six misstatements alleged by the plaintiff.