The High Court overturned a 5th Circuit ruling against the Erica P. John Fund, which wants to represent all investors who bought Halliburton stock between June 1999 and December 2001.
Thomas Lee Hazen of the University of North Carolina School of Law is one of more than a dozen law professors who filed a brief on behalf of the shareholders.
“The prior law in the 5th Circuit had been very restrictive in terms of justifying dismissal of a lot of class actions at the early stage. The Supreme Court’s view is simply saying, ‘We’ll let the plaintiff get in the courthouse door, state their claim, and then we’ll let the plaintiff try to prove the causation that he or she is trying to establish.’”
The shareholders’ 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.