Rule 10b-5 private damages actions cannot proceed on a class basis unless the plaintiffs are entitled to the fraud-on-the-market presumption of reliance. In Halliburton II, the Supreme Court provides defendants in such actions with an opportunity, before class certification, to rebut the fraud-on-the-market presumption through evidence that the misstatement had no effect on the issuer’s share price. It left unspecified, however, the standard by which the sufficiency of this evidence should be judged. This Article explores the two most plausible approaches that the courts might take to setting this standard. One approach would be for the courts to impose the same statistical burden on defendants seeking to show there was no price effect as is currently imposed on plaintiffs to show that there was a price effect when the plaintiffs later need to demonstrate loss causation. The other approach would be to decide that defendants can rebut the presumption of reliance simply by persuading the court that the plaintiffs will not be able meet their statistical burden. If the courts choose the first approach, Halliburton II is unlikely to have much effect on the cases that are brought or on their resolution by settlement or adjudication. If they choose the second approach, the decision’s effect will be more substantial. The Article concludes with a brief discussion of some of the considerations that should be relevant to courts in their choice between the two approaches.
{"title":"Halliburton II: It All Depends on What Defendants Need to Show to Establish No Impact on Price","authors":"M. Fox","doi":"10.2139/SSRN.2488055","DOIUrl":"https://doi.org/10.2139/SSRN.2488055","url":null,"abstract":"Rule 10b-5 private damages actions cannot proceed on a class basis unless the plaintiffs are entitled to the fraud-on-the-market presumption of reliance. In Halliburton II, the Supreme Court provides defendants in such actions with an opportunity, before class certification, to rebut the fraud-on-the-market presumption through evidence that the misstatement had no effect on the issuer’s share price. It left unspecified, however, the standard by which the sufficiency of this evidence should be judged. This Article explores the two most plausible approaches that the courts might take to setting this standard. One approach would be for the courts to impose the same statistical burden on defendants seeking to show there was no price effect as is currently imposed on plaintiffs to show that there was a price effect when the plaintiffs later need to demonstrate loss causation. The other approach would be to decide that defendants can rebut the presumption of reliance simply by persuading the court that the plaintiffs will not be able meet their statistical burden. If the courts choose the first approach, Halliburton II is unlikely to have much effect on the cases that are brought or on their resolution by settlement or adjudication. If they choose the second approach, the decision’s effect will be more substantial. The Article concludes with a brief discussion of some of the considerations that should be relevant to courts in their choice between the two approaches.","PeriodicalId":404265,"journal":{"name":"LSN: Discovery & Evidence (Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114406908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Brand appropriation litigation in Australia centres on one or more claims of trade mark infringement, breach of s18 of the Australian Consumer Law (formerly s52 of the Trade Practices Act), and commission of the tort of passing off. At the core of these actions is an allegation that the consumer was relevantly misled into buying the pirate brand rather than the legally protected one. Expert evidence, such as consumer survey evidence and that from marketing psychologists, is often but not universally tendered in cases of this type. The adducing of evidence in this category tends to prolong litigation and increase its cost. It is therefore appropriate to examine its utility. Cases to be commented upon include those centring upon the fictional Duff beer “brand”, the Cadbury brand (where Cadbury sought a monopoly on the shade of purple associated with its branding), and the Red Bull energy drink brand.
{"title":"Evidential Issues in Brand Appropriation Litigation","authors":"P. Gillies","doi":"10.2139/ssrn.2225622","DOIUrl":"https://doi.org/10.2139/ssrn.2225622","url":null,"abstract":"Brand appropriation litigation in Australia centres on one or more claims of trade mark infringement, breach of s18 of the Australian Consumer Law (formerly s52 of the Trade Practices Act), and commission of the tort of passing off. At the core of these actions is an allegation that the consumer was relevantly misled into buying the pirate brand rather than the legally protected one. Expert evidence, such as consumer survey evidence and that from marketing psychologists, is often but not universally tendered in cases of this type. The adducing of evidence in this category tends to prolong litigation and increase its cost. It is therefore appropriate to examine its utility. Cases to be commented upon include those centring upon the fictional Duff beer “brand”, the Cadbury brand (where Cadbury sought a monopoly on the shade of purple associated with its branding), and the Red Bull energy drink brand.","PeriodicalId":404265,"journal":{"name":"LSN: Discovery & Evidence (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125145476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article argues that discovery requests are susceptible to waste and abuse due to the moral hazard inherent to a producer pays system, and that one approach to solving these problems would be to include certain e-discovery related costs to the list of taxable costs contained in 28 U.S.C. § 1920. Adding e-discovery related costs (excluding attorney related fees) to the list of taxable cost in § 1920 would help to curb overbroad discovery request and act as a deterrent to discovery requests that are primarily calculated to drive up litigation expenses. By aligning transaction costs with the requesting party, the requesting party is more likely to make a request in which “the burden or expense of the proposed discovery outweighs its likely benefit.” This article discusses some of the issues involved in using a taxable cost approach, namely balancing the efficiencies and cost savings produced by aligning the costs of production with the requesting party against keeping courts accessible to indigent plaintiffs. This paper ends by proposing a model amendment that incorporates the Electronic Discovery Reference Model (EDRM) and discusses how such a rule might be applied in practice.
{"title":"Curbing Abusive Discovery by Including Certain E-Discovery Related Costs to the List of Taxable Costs in 28 U.S.C. § 1920","authors":"A. Mendenhall","doi":"10.2139/SSRN.2145459","DOIUrl":"https://doi.org/10.2139/SSRN.2145459","url":null,"abstract":"This article argues that discovery requests are susceptible to waste and abuse due to the moral hazard inherent to a producer pays system, and that one approach to solving these problems would be to include certain e-discovery related costs to the list of taxable costs contained in 28 U.S.C. § 1920. Adding e-discovery related costs (excluding attorney related fees) to the list of taxable cost in § 1920 would help to curb overbroad discovery request and act as a deterrent to discovery requests that are primarily calculated to drive up litigation expenses. By aligning transaction costs with the requesting party, the requesting party is more likely to make a request in which “the burden or expense of the proposed discovery outweighs its likely benefit.” This article discusses some of the issues involved in using a taxable cost approach, namely balancing the efficiencies and cost savings produced by aligning the costs of production with the requesting party against keeping courts accessible to indigent plaintiffs. This paper ends by proposing a model amendment that incorporates the Electronic Discovery Reference Model (EDRM) and discusses how such a rule might be applied in practice.","PeriodicalId":404265,"journal":{"name":"LSN: Discovery & Evidence (Topic)","volume":"2015 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127316904","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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