© 2014 The Texas Lawbook.
By Mark Curriden, JD
Senior Writer for The Texas Lawbook
(March 7) – When the U.S. Supreme Court conducted oral arguments this past week in a case that could potentially significantly restrict large class action securities lawsuits across the country, there was a very strong Texas flavor.
The lead lawyer arguing the case was from Baker Botts in Houston and the lawyer who authored a legal brief that many experts predict will be decisive in the justices’ ultimate decision was from Vinson & Elkins in Austin.
Aaron Streett, the Baker Botts partner, had the leading role at the nation’s highest court Wednesday, asking the justices on behalf of his client, Halliburton Co., to reverse a Supreme Court precedent issued 26 years ago that ignited an avalanche of class action securities lawsuits against publicly traded corporations.
“Basic has proven unworkable, has been undermined by later developments and has proven to have harmful consequences for investors and companies alike,” Streett told the justices. “The most direct course is to overrule Basic altogether and require a showing of actual reliance.”
The case stems from a lawsuit filed in 2002 by shareholders of Halliburton claiming the company hid the legal and financial liabilities it faced from asbestos litigation.
This was the first time that Streett, who turned 37 this week, argued a case before the nation’s highest court, which is considered the pinnacle of most lawyers’ careers. He did witness about 75 such arguments in 2003 and 2004 when he clerked for then Chief Justice William Rehnquist.
“It is such a rush and very exhilarating, and it hits you as soon as you stand up there,” says Streett. “The thing that strikes you as an advocate is that you are surprised at how close the justices are to you. Their voices are coming at you from the side and it takes a few seconds to figure out who is asking the question.”
Streett said he made sure that he avoided the mistake of calling justices by their wrong name, which has been made by a handful of other lawyers. He wrote out the first two paragraphs of his argument, just in case he stood up and was nervous.
“I was surprised that I made it into the second paragraph before I was hit with the first question by Justice [Ruth Bader] Ginsburg,” he said, noting that the justices frequently interrupt advocates very quickly.
Streett said that arguing a case at the nation’s highest court is an amazing experience, but that very few cases in general are decided by the justices because of the oral arguments.
“Conventional wisdom is that, in general, cases are decided mostly by the briefs and only occasionally do oral arguments cause the justices to decide one way or another,” he said. “And it is generally true that while you rarely win a case during oral argument, you can lose a case in oral argument.
“That’s what makes oral argument so scary for the advocates,” he said.
Macey Reasoner Stokes, who heads Baker Botts’ appellate practice, said Streett has unique insights into the workings of the Supreme Court and viewpoints of its justices because he clerked at the Court.
“While he is a zealous advocate, he avoids the trap that a lot of good lawyers fall into of believing so strongly in his client’s position that he can’t see the relative merits of the opposing side’s position,” said Stokes, who practices in Houston. “His ability to recognize the weaknesses in his client’s position and consider the best way to defend against challenges makes him an even better advocate for his client.
While Streett’s talents shone on center stage, V&E appellate law partner Jennifer Poppe authored a legal brief that legal experts say appears to be the path forward favored by a number of justices.
Poppe, who is 40 and practices in Austin, wrote a 35-page “friend of the court” brief on behalf of two law professors who specialize in securities law. They offer a compromise that would make it somewhat more difficult than it is now to win class action certification in a securities lawsuit, but not make it entirely impossible.
In essence, Poppe’s brief argues that the proper ruling for the Supreme Court would be to require plaintiff’s lawyers to prove that the false statements made by the company had an impact on the price of its stock.
“We were encouraged by the number of times that our brief was mentioned by multiple justices describing it as the middle ground,” said Poppe, who handled the matter pro bono for the two professors, who teach at the University of Michigan and the University of Chicago law schools.
A decision in the case is expected by the end of June.
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