Nation - High court to review class action vs. Halliburton

WASHINGTON (AP) -- The Supreme Court agreed last week to hear an appeal by Halliburton Co. shareholders who want to pursue a class-action lawsuit claiming the oil services company inflated its stock price starting when former Vice President Dick Cheney ran it.

The court said it will take up a challenge to an appeals court ruling against the shareholders, who want to represent all investors who bought Halliburton stock between June 1999 and December 2001.

Cheney, who is not named in the lawsuit, was Halliburton's chief executive until 2000, when he resigned to run for vice president.

The merits of the lawsuit are not at issue before the court, only whether it may proceed as a class-action.

Class-actions increase pressure on businesses to settle lawsuits because of the cost of defending them and the potential for very large judgments.

The investors are represented by David Boies, the lawyer who argued the losing side in the Supreme Court case that settled the 2000 presidential election in favor of the Republican ticket of George W. Bush and Cheney.

The lawsuit argues that Halliburton deliberately understated the company's liability in asbestos litigation, inflated how much money its construction and engineering units would bring in and overstated the benefits of a merger with Dresser Industries.

The 5th U.S. Circuit Court of Appeals in New Orleans refused to let the lawsuit go forward as a class-action. The investors, backed by the Obama administration, argue that the 5th Circuit set too high a bar for class-action lawsuits.

The case will be argued later this year.

The case is Erica P. John Fund Inc., v. Halliburton Co., 09-1403.

Published: Wed, Jan 12, 2011