Restoring the Balance of Class Certification Power in the Fifth Circuit: The United States Supreme Court's Opinion in Erica P. John Fund, Inc. v. Halliburton, Co.

In Oscar and Halliburton, the Fifth Circuit held that in addition to proving all of the Federal Rule of Civil Procedure (“FRCP”) 23 requirements, a putative securities class must prove loss causation by a preponderance of all admissible evidence before class certification may be granted.4 This was an exceedingly high burden and was noted as such by district courts within the Fifth Circuit, including twice by District Judge Barbara M.G. Lynn in the District Court’s Halliburton opinion.5 The Supreme Court apparently agreed with Judge Lynn that the burden was “exceedingly high” and overruled the Fifth Circuit’s decisions in Oscar and Halliburton: “[t]he question presented in this case is whether securities fraud plaintiffs must also prove loss causation in order to obtain class certification…. [w]e hold that they need not.