Supreme Court Clarifies That Loss Causation Is Not Required to Obtain Class CertificationOn June 9, 2011 by Schnader
In a favorable ruling for shareholders, the Supreme Court resolved a split among the circuit courts when it held that securities fraud plaintiffs are not required to prove loss causation to obtain class certification. Prior to this decision, the United States Court of Appeals for the Fifth Circuit stood alone in requiring proof of loss causation at the class certification stage. The Supreme Court’s decision in Erica P. John Fund, Inc. v. Halliburton Co., et al. now brings the Fifth Circuit in line with the majority view. This Alert discusses the recent decision.