Author: Jason R. Halpin

Second Circuit Clarifies Burden of Rebutting the Basic Presumption Under Halliburton II

In In re Goldman Sachs Group, Inc. Sec. Litig., the Second Circuit confirmed that, at the class-certification stage in a securities-fraud class action, the defendant bears the burden of persuasion to rebut the presumption of reliance under Basic v. Levinson by a preponderance of the evidence. The decision follows on the heels of a separate Second Circuit panel’s similar decision in Waggoner v. Barclays PLC and clarifies that a defendant need not provide “conclusive evidence” to rebut the presumption. Goldman Sachs is one of several federal court decisions interpreting Halliburton Co. v. Erica P. John Fund, Inc. (Halliburton II), which declined to dispense with the Basic presumption of reliance – which is premised on the “fraud-on-the-market” theory – but held that the presumption can be rebutted by “any showing that severs the link between the alleged misrepresentation and either the price received (or paid) by the plaintiff, or his decision to trade at a fair market price.” Since Halliburton II was handed down, courts have wrestled with the proof a defendant must offer to rebut the presumption. In Waggoner v. Barclays PLC, issued in November 2017, the Second Circuit resolved the question by holding that a defendant bears the burden of persuasion to rebut the Basic presumption by a preponderance of the evidence. In Goldman Sachs,...

Supreme Court Rules That Statute of Repose Trumps Class Action Tolling

The Supreme Court has given a boost to companies defending against securities claims, ruling in California Public Employees’ Retirement System v. ANZ Securities that a statute of repose cannot be extended by the doctrine that the filing of a class action tolls the statute of limitations for the claims of absent class members. The case emanated from a prior class action that had alleged, in connection with certain offerings by Lehman Brothers Holdings Inc., violations of Section 11 of the Securities Act of 1933, which relates to misrepresentations and omissions made in a securities registration statement. Section 13 of the Act provides that any such claim must be brought within “three years after the security was bona fide offered to the public.” CalPERS, which was an absent class member in the original class action, filed its own class action complaint more than three years after the transactions at issue and then opted out of the original class action. Affirming the decisions of the Southern District of New York and the Second Circuit, the Supreme Court held that the three-year limit in Section 13 is a statute of repose, and that such a limit cannot be extended by any court-made tolling doctrine. CalPERS argued that the statute was tolled under American Pipe & Construction Co. v. Utah during...

Federal Law Preempts NJ Fair Credit Report Act and TCCWNA Claims, New Jersey Court Says

Claims based on a retailer’s improper inclusion of too many credit card digits or a credit card expiration date on a sales receipt may not be brought under either the New Jersey Fair Credit Report Act (“NJFCRA”) or New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), according to a recent ruling by the New Jersey Law Division.