$100M Halliburton Asbestos Class Action Settlement Gets Final Approval

A Texas federal judge has approved a $100 million class action settlement that would resolve claims that Halliburton Co. lied about its role in asbestos claims to its investors.

Class action plaintiffs brought securities claims against Halliburton, alleging the company lied about its financial liability related to asbestos litigation in 2001.

In 2001, said the plaintiffs, the company issued an announcement about a $30 million verdict against one of its subsidiaries in an asbestos lawsuit. The plaintiffs alleged that in failing to adequately disclose its liability regarding the asbestos claims, Halliburton artificially inflated its stock price. After losing the asbestos lawsuit, the company’s stock price dropped by 40 percent.

Halliburton finally agreed to settle the class action lawsuit after U.S. District Judge Barbara M. Lynn allowed the proposed Class to be certified in 2015. The Class includes investors who bought Halliburton common stock between Aug. 16, 1999 and Dec. 7, 2001.

The Erica P. John Fund Inc., a Milwaukee charitable foundation acted as lead plaintiff. The organization endured through two sets of legal counsel after initiating the class action in 2002. Judge Lynn indicated in a preliminary hearing that she was “disinclined” to award fees to counsel that fought replacement after being accused in another securities action. The judge pointed out that those attorneys had failed to consult the lead plaintiff in an attempt to settle in 2004.

Judge Lynn praised a leader of the Erica P. John Fund who eventually replaced the original lead counsel and resisted the initial settlement offers. “Ms. John’s tenacity in this case is quite extraordinary and worthy of comment,” Judge Lynn noted, awarding the lead plaintiff a $100,000 fee. Class counsel will receive a third of the $100 million settlement award.

The class action had been to the United States Supreme Court on two occasions over the years of litigation. In one case, the Supreme Court ruled there was no requirement for the class action plaintiffs to show that their losses were caused by Halliburton’s alleged misstatements about their asbestos liability.

In the other Supreme Court case, the Court ruled that the class action plaintiffs could rely on the presumption that a publicly traded company’s stock price is affected by public information about that company, including the alleged misrepresentations by Halliburton.

Halliburton denies the misstatements and maintains that they did their best to provide all necessary information to investors about the asbestos litigation at that time.

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Erica P. John Fund is represented by David Boies and Carl E. Goldfarb of Boies Schiller Flexner LLP and Kim E. Miller, Lewis S. Kahn, Michael Swick and Neil Rothstein of Kahn Swick & Foti LLC.

The Halliburton Securities Class Action Lawsuit is Erica P. John Fund Inc. v. Halliburton Co., Case No. 3:02­-cv-­01152, in the U.S. District Court for the Northern District of Texas.