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On June 23, 2017, Judge Paul A. Magnuson of the federal District Court of Minnesota denied plaintiffs’ request to file a renewed motion for class certification in a securities action against Simpson Thacher’s clients, Best Buy and certain executives, seeking hundreds of millions of dollars in damages. Simpson Thacher previously obtained an Eighth Circuit reversal of the certification of a class, after being engaged following the district court’s decision granting class certification. The Eighth Circuit decision was the first circuit court to address the standards under which defendants can offer evidence of a lack of price impact to rebut the fraud-on-the-market presumption of reliance, under the Supreme Court’s Halliburton II decision. The Eighth Circuit adopted Defendants’ arguments that they successfully rebutted the presumption of reliance with evidence that Best Buy’s stock price did not move when the alleged misstatements were made. It further held that once the presumption was rebutted, Plaintiffs failed to meet their burden of proving price impact.

On remand, plaintiffs sought to file a renewed motion for class certification, arguing that they should have the opportunity to present additional evidence of price impact. Defendants responded that the Eighth Circuit decision conclusively determined that no class may be certified in the case and that the district court could not revisit the class issue. The district court agreed and denied plaintiffs’ application, holding that the case may not proceed as a class action.

The Simpson Thacher team includes Joseph M. McLaughlin, George S. Wang, Daniel J. Stujenske and Elizabeth Wilkerson (Litigation).