No matter how the Court rules, the decision should have a significant impact on the large number of securities class actions working their way through the courts. By determining whether class certification will give defendants a real opportunity to test plaintiffs’ claims that the class wide presumption of reliance should apply, the Court’s decision will determine whether class certification can be an important event for settlement and will provide defendants with an opportunity to bring an early appeal. The threat of a negative ruling on the merits at the class certification stage or of an early appeal provides companies, their directors and officers and their insurers with additional leverage and an incentive to “stick it out,” as Mr. Sterling [counsel for Halliburton] suggested, if a motion to dismiss is denied.
Professor Barbara Black, writing at The Conglomerate, summed it up like this:
The most important message: Nobody, not even defendant's counsel, supports the Fifth Circuit's position that requires plaintiffs to prove loss causation at the class certification stage.
She also said that the argument gave "no indication that they want to relax the requirements for class certification." (According to a disclaimer at the end of this post, Professor Black was a signatory to an amicus brief urging reversal of the Fifth Circuit's decision.)