Securities Law | Expert Legal Commentary
August 11, 2009
Alaska Elec. v. Flowserve: Loosening the Loss Causation Standard to Revive Investors’ Fraud Claims
Alaska Electrical Pension Fund v. Flowserve Corp.
By
Josh Lawler and Joel B. Ginsberg of Zuber & Taillieu LLP
With the help of a former Supreme Court justice, the Fifth Circuit entered an important opinion in the continuing controversy among federal circuits regarding the standard for loss causation in securities fraud cases, perhaps foreshadowing an issue that will ultimately head to the Supreme Court. In Alaska Electrical Pension Fund v. Flowserve Corp., ___ F.3d ____, 2009 WL 1740648, Nos. 07-11303 and 08-10071 (5th Cir. June 19, 2009), a per curiam opinion by a Fifth Circuit panel that included retired Justice Sandra Day O’Connor (sitting by designation) overturned the Northern District of Texas’ denial of class certification and grant of summary judgment for defendants, finding that the lower court had relied upon an erroneous loss causation standard. The opinion lowers the ever-increasing bar placed before securities class action that may be keeping even meritorious cases out of court.
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About the Authors
Josh Lawler is a Partner of Zuber & Taillieu LLP, focusing on corporate law and securities and finance law.
Joel B. Ginsberg is an Associate of Zuber & Taillieu LLP, focusing on corporate law, and securities and finance law.
Image Credit: ©iStockphoto.com/seannnnn5
View a PDF of the judicial opinion