1 (Slip Opin i o n) OCTOBER T ERM, 20 10 Sy llabu s N O TE : Wh er e it i s feas ibl e , a s y llab u s (h ead n ot e) wil lbe rel e as ed , as is bein g d o n e incon n ecti onwithth is cas e , a tth e ti meth e op in i o n is is s u ed

. Th e s y ll abu s con s titu tes n o p a rt of th e op in i o nof th eC o u r t bu t h a s be en pre p are dbyt h e Re po rte ro f De ci sio n s fo r t h e co nveni e nce of t h e reade r . Se e United Statesv. Detroit Timbe r& Lumb er Co., 200U. S

. 3 21, 337

. 

# SUPREME CO URT O FTHE UNI TED STATES
Sy llabu s 

### ERICA P. J O HN FU N D , INC., FKA 

### ARC HDIOCE SE OF MILWAUKEE SUPP ORTING FUND, INC. v . HAL L IBUR TON CO. ET AL


### . CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 09–1 40 3. Ar g u ed Apr i l 25, 201 1—Dec i ded Ju n e6, 201 1 Petitioner Eri c a P. John Fund, Inc. (EPJFu n d), is th e l e ad pl ain t iff i na

putativ esec u r i ties fr aud c l ass ac t i on filed ag ainst Hal libur ton Co. and one of its executives (collectively Halliburton). EPJ Fund alleges th at Halli bu r t onmade v a r i ou s misr epr e sen t ation s desig n ed to in flate the company’s stock price, in violation of §10(b) of the Securities Ex

c h an g eAc t of 19 34 an d Se c u r i ties an d Ex c h an g eCommis s ionRu l e 10b –5. EPJF u n dalso c o n t e n ds th atHal l i b u r tonlater made a n u m b e r of co rre ct ive dis c los u res t h a tca us ed t h e s t ock pricet odrop a n d, cons eq uently, inves t ors to los emone y. EPJFund s o ught to have its propos ed cla s s cert ified purs ua ntt oFederal Rule of Civil Procedure 23. Th e Distr i c tCou r t fou n d th at th e su it c o u l d pr oc eed as a c l as s ac tionu n d erRu le 23(b)(3), bu t fo r one problem: Fif t h Circuit prece

dentreq u ired s e curit i es fraud pla i ntiffs to prove “los s ca us a t ion”— i.e. , that the defendant’ s dec e ptiv e conduct caused the investors’ claimed economic loss—in order to ob t a in cla s s cert ifica t ion. The Distr i c tCour t c o nc luded that EPJ Fund had failed to sa tisfythat r e quirement. T h e Court of Appeals ag reed and affirmedthe denialof cla s s cert ifica t ion. Held: Securities fraud plain t iffs need not prove los s ca us a t ion in order

to obtainc l as s c e r t ific ation

. Pp. 3–10.

(a) In order t o cert ify acla s s underRule 23(b)(3), a court must fin d “that the que s tions of law orfactcommon to class members predomi

n a te ov erany qu estion s affe c t in gon l yin div i du al membe r s, an d th at a c l ass ac tion is su per i orto oth e rav ailabl e meth ods for fair lyan d ef

ficient l y a d j u dica t i ng t h e co nt rovers y . ” Cons idering w h et her “ q ues -2 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Sy llabu s tions of l a w orfac tc o mmon to c l as s me mbers predominate” begins, of course, with th e elements of the un derlying cause of action. The ele

ments of a pri v ate securities fraud cl aim based on violati o ns of §10(b) an d Ru le 10 b– 5 ar e: “(1) a m a ter i al misr ep r e sen t ationoromis sionb y the defendant; (2) scienter; ( 3 ) a c o nnec t ion between the misr epr e sen tation or omission and t h e purc ha s eor s a le of a s e curit y ; (4) relia nc e upon the misrepresentation or omis sion; (5) economic loss; and ( 6 ) loss causa t ion.” Matrixx Init iatives, In c. v. Siracu sano , 563 U. S. ___,

___.

Whether com m on questions of law or factpredominate in such an action often turns on the element of relia nce. The traditional way a plain t iff c a nd e mon s tr ate r e l i an c eis bysh owin gth at h e was awar e of a c o mpan y ’ s s t ate m en t an d en g a g e d ina r e lev a n ttr an s a c t ion

—e.g. , purchasing co mmon stock—basedon thatspec ific mi sr epr e sen t ation

. The Court recognized in Basic Inc

. v. Le vi n s o n , 485 U. S. 22 4, h o w ever, that “[r]equiring pro o f of individualized relianc e from each member of the proposed plai ntiff cl ass effectively would” prevent such plain t iff s “fr o m pr oc eedin g witha c l ass ac tion , sin c e in div i du al is

sues” would “ov e r w helm[ ] the c o mmon ones.” Id. , at 242. Th e Cour t in Basics o ught to a llevia t e tha tconcer n b ypermittingpla i ntiffs to in v o ke a r e bu t t able pr esu m p t ionof r e li an c eba sed onwh at i s kn own as the “fr a ud- o n-the-mar k et” theor y . Accor d ingto that theor y , “the market price of shares trad ed on well-developed m a rket s reflects al l pu blic lyav ailable in for m ati o n , an d, h e n c e, an y mater i al misr epr e sen t ation s . ” Id. , at 246. U n derth at doc t r i n e , th e Cou r t ex plain e d, on e c a nassu me anin v e sto rr e lies on publicmis s ta teme nts whenever h e“bu y s or sells stoc k at th e price set by the market.” Id. , at 247. The Cour t also made c l earthat the pr esumption c o uld be r e butted by appr opr i ate ev iden c e . Pp. 3–5.

(b) It is undis puted that sec u r i ti es fraud plaintiff s must prove cer

tain things in order to invoke Basic ’s rebuttable presumption of reli

anc e . Ac c o r d ingto the Court of Appea l s, EPJ Fund had to pr ov e the separate ele m ent of loss causation in order to trigger th e presump tion. That re quirement is not justified b y Basico rits logic. T h is Court ha s nev e r mentioned los s ca us ation a s aprecondition for invok

ing Basic ’ s r e bu ttable pr esu m ption

. Loss c a u s ationadd r esses a m a t

t e r differentfromwhet her a ninves t or relied on a m i s r epres e nt a t ion , presumptively or othe rwise, wh en buying o rselling a stock.

The Court has referred to the elem ent of reliance in a private Rule 10b –5 ac tion as “ t r a n s ac tio nc a u s ation , ” n o t loss c a u s ation

. Dura Pharm a ceu tic a ls, Inc. v. Broudo , 544 U. S. 33 6, 34 1– 3 42. Con s isten t wit ht h a tdes cript ion, whe n cons id ering whether a plaintiff has relied ona misr epr e sen t ation , th e Cou r t h a s ty pic a llyfoc u sed onfac t s su r rounding the investor’s decision to enga g ei nt h e t r a n sa ct i o n. Loss3 Cite as: 56 3 U

. S. ____ (2011) Sy llabu s
c a u s ation , byc o n t r a st, r e qu ir es a plain t iff to sh ow th at th e misr epr e s e nta t ion ca used as u b s eq uent economic lo s s . Tha tha s nothing to do with whether an investor relied on thatmi sr epr e sentatio n in the fir s t place, either directly or thro ugh the fraud- on-the-mar ket theory. The Courtof Appea l s ’ rule con t ravenes Basic ’s fundamental premise— that an invest or presumptively relie s ona misr epr e sen t ationso lon g as it wa s r e fle c ted in the ma r k et pr ic e at t h e time of his tr ansac t ion. Pp. 5–8.

(c) Halliburton concedes that securi ties f r aud plaintiff s should not be required to prove loss ca usat ion in order to invoke Basic ’s pre sumption of reliance. Hallib urton no nethe l ess defends t h e judgment below on the ground that the Cour t of Appeals did notactually re

q u ire EPJFu nd to prove“los s ca us a t ion” a s the Court ha s us ed tha t t e rm . According t oHa llib u rt on, “ l os s ca usa t ion” was s h ort h a n d for a different analysis. The lower co urt’s actual inquir y, Ha lliburton in

sist s, w a s w h e t h e rEPJ Fu n dh a d de mons tr ated “ p r i c eimpac t”—tha t is, whether the alleged misr epresent ations affected the market price in the first place.

The Cour t does not ac c ept Halliburton ’ s interpretation of the Court of Appeals’ opinion. Loss causation is a familiar and distinct concept in securities law; it is not price im pact. Whatever Halliburton thinks the Court of Appeals meant to say, what it said was loss causation. The Court takes the Court of Appeals at its word. Based on those words, the decision below cannot stand. Pp. 8–9. 597 F. 3d 33 0, v a c a ted an d r e man d ed.

R OBERTS , C. J

. , delivered theopinion fora una nimous Court._________________

_________________ 1 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt
NOTIC E : Th is op i n ionis subjec t to f o rma lrevi si onbef o r e publicat ioninth e p r eli m in ary p rin t of th e U n it edS t at es R e p o rts

. R e ad ers ar e r e qu es ted to n o tif yth e R e p o rt e rof D e c i s i on s , Su p r em e C o u rt of th e U n ited St at es , Wa s h

ington, D. C. 2054 3, of any typ o gra p hical or other f o rmal err o rs , in or der th atc o rr ect i on sm a y b e mad eb e f o r e th ep r e lim in aryp rin t go es t o p r es s . 

# SUPREME CO URT O FTHE UNI TED STATES

No. 09–1 40 3 

### ERICA P. J O HN FU N D , INC., FKA 

### ARC HDI O CE SE

OF MILWAUKEE SU PPORTING FUN D , IN C.,

PETITIONER v. HALL IB U R TONC O

. ET AL


### . ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FIFTH CIRCUIT [Ju n e6, 2011] 

### C HIEF 

### J U S TICE 

### R OBER TS 

### delivered the opinion of the Court. To prevail on the mer i ts in a private securities fraud action, investors must demonstrate that the defendant’s deceptive c o nduct cau s ed their claimed economic loss. This requirement is commo nly referred to as “loss causa tion.” The question presented in this case is whether securities fraud plaintiffs must also prove loss causation in order to obtain class certificat i on. We hold that th ey need not. I Petitioner Erica P. Jo hn Fund, Inc. (EPJ Fund), is the lead plaintiff in aputative securities fraud class action filed against Halliburton Co. and one of it s executives (collectively Halliburton). The suit was brought on behalf of allinves t ors who purchased Halliburton c o mmon stoc k between June 3, 1999, and December 7, 2001. EPJ Fun d alleges that Halliburton made various mis

representations design ed to inflateits stockprice, in viola

tion of §10(b) of the Securities Exchange Act of 1934 and2 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Opinion of theCourt 

### Securities and Exchan ge Commission Rule 10 b–5. See 4 8 Stat. 891, 15 U. S. C. §78j(b); 17 CFR §240.10b–5 (2010). The complaint asserts that Halliburton deliberately made false statements abou t(1) the scope of its potential liabil

ity in asbestos litigation, (2) its expected re venue from certain construction contracts, an d (3) the benefits of it s merger wi th another company. EPJ Fund contends that Halliburton later made a numbe r of correctiv e disclosures that cause dits stock price to drop and, consequently, investors to lose m o ney. After defeating a motion to dismiss, EPJ Fund sought to have its proposed clas s certified pursuant to Federal Rule of Civil Procedure 23. The parties agreed, and the District Court held, that EPJ Fund satisfied the general require

ments for class actions set out in R u le 23(a): T h e class was sufficiently numerous, there were common questions o f law or fact, the claims of the representative parties wer e typical, an d the repre s entative parties would fairly an d adequately protect the interests of the class. See App. to Pet. for Cer t . 3a. The District Court al so found that the action could proceed as a class acti on under Rule 23(b)(3), but for on e problem: Ci rcuit precedent re quired securities fraud plain

tiffs to prov e “loss causation” in order to obtain class certi

fication. Id

. , at 4a, an d n. 2 (citing Os car Pr i v ate Equi ty Invs. v. All e gian ce Tel ecom, Inc. , 487 F. 3d 261, 269 (CA5 2007)). As the District Court explained, loss causation is the “ ‘causalconnection between the material misrepresen

tation and the [economic] loss’ ” suffered by investors. App. to Pet. for Cert. 5a, and n. 3 (quoting Dura Pharma

ceuti cals, Inc. v. Brou do , 544 U. S. 336, 342 (2005)). After reviewing the alleged misrepresentations and corrective disclosures, the District Court concluded that it could n o t certify the class in this case becaus e EPJ Fund had “faile d to establish loss causation with respect to any” of it s claims. App. to Pet. for Cert. 54a. The court made clear,3 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt 

### however, that absent “this strin g ent loss causation re

quirement,” it would h a ve grant edthe Fund’s certificatio n request. Ib id. The Court of Appeals affirmed the denial of class certifi

cation. See 597 F. 3d 330 (CA5 2010). It confirmed that, “[i]n order t o obtain class certificat i on on its claims, [EPJ Fund] was required to prove loss causation, i.e., that th e correctedtr uth of the former falsehoods actually cause d the stock price to fall and resulted in the losses.” Id. , at 334. Like the District Cou rt, the Court of Appeals con

cluded that EPJ Fund had failed to meet the “require

ments for p r oving loss causation at the class certification stage.” Id. , at 344. We granted the Fund’s petition for certiorari, 562 U. S. ___ (2011), to resolve aconflict among the Circuits as to whether securities fraud plaintiffs must prove loss causa tion in order to obtain class cert ification. Compare 597 F. 3d, at 334 (case b e low), with In re Sa lomon Analys t Metromedi aLiti ga tion , 544 F. 3d 4 74, 483 (CA2 2008) (not requiring investors to prove loss causation at class certifi

cation stage ) ; Schl eiche r v. Wendt , 618 F. 3d 6 79, 687 (CA7 2010) (same); In re DV I, Inc. Secu ritie sLi tiga tion , No. 08– 8033 etc., 2011 WL 1125926, *7 (CA3, Mar. 29, 201 1) (same; decided after certiorari was granted). II EPJ Fund contends that the Court of Appeals erred by requiring proof of loss causation for class certification. We agree. A As noted, the sole dis p ute here is whether EPJ Fu n d satisfied the prerequisites of Rule 23(b)(3). In order to certify a class under th at Rule, a c o urt must find “that th e questions of law or fact common to class members pre

dominate over any q u estions af fecting only individu al4 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Opinion of theCourt 

### members, and that aclass action is superior to other available methods for fairly an d efficiently adjudica ting the controv e rsy.” Fed. Rule Civ. Proc. 23(b)( 3 ). Consider

ing whethe r “questions of law orfact common to class members predominate” begins, of course, with the ele

ments of th e underlyin g cause of a ction. The elements of a private securities fraud claim bas ed on violations of §10(b) and Rule 1 0b–5 are: “ ‘(1) a material misrepr e sentation or omissionb ythe defendant; (2) scienter; (3) a connection between the misrepres e ntation oromiss i on a n d the pur

chase or sale of a sec u rity; (4) reliance upo nthe misrepresentation or om issi on; (5) eco n omic los s ; and (6) l o ss causation.’ ” Matrixx I n itiati ves, Inc. v. Sir a cusano , 56 3 U. S. ___, ___ (2011) (slip op., at 9) (quoting Stoneridge Investmen tPartn e rs , LLC v. Sci e ntific-A tlan ta, Inc. , 552 U. S. 148, 157 (2008)). Whether common ques t ions of law or fact predominate in a securities fraud action often turns on the element of reliance. T h e courts below determined that EPJ Fund had to prove the separate element of l o ss causati o n inorder to establish that reliance was capable of res o lution ona common, classwide basis. “Reliance by the plaintiff upon the defendant’s deceptive acts is an e ssential element of the §10(b) private cause of action.” Sto n eridge , su pra , at 159. This is because proof of reliance en sures that there is a proper “connection be

tween a defendant’s misrepresentation and a plaintiff’s injury.” Ba sic Inc. v. Le vins on , 485 U. S. 224, 243 (1988). The traditional (and most direct) way a plaintiff can demonstrate reliance is by showing that he was aware of a comp any’s statement and engaged in a relevant transaction

—e.g. , purchasing common stock

—based on that specific misrepresentatio n. In that situation, the plaintiff plainly would have re lied on the company’s dece p tive conduct. A plain t iff unaware of the relevant state

ment, on the other h and, could not establis h reliance on5 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt 

### that basis. We recognized in Ba si c , however, that limiti n g proof of reliance insuch a way “would place an unnecessarily unrealistic evidentiary burden on the Rule 10b–5 plaintiff who has traded on animpersona lmark et.” Id. , a t245

. We also ob served that “[r]equi ring proof of individualized reliance fro m each me mber of theproposed plaintiff clas s effectively would” prev ent suchpl aintiffs “from proceeding with a class action, since individ ual issues” would “ove r whelm[ ] the common o n es.” Id. , a t242. The Court in Basic sought to alleviate those related concerns by permittin gplaint iffs to invoke a rebuttable presumption of relian c e based on what is known as the “fraud-on-t h e-market” theory. According to that theory , “the mark et price of shares traded on well-developed markets reflects all publicly ava ilable infor m ation, and, hence, any material misrepresentations.” Id. , at 2 46. Because th e market“t ransmits information t o the invest or in the processed form of a mark et price,” we can assume, the Court explained, that an investor relies on public misstateme n ts whenever he “buy s or s e lls stock at th e price set by the market.” Id. , at 2 44, 247 (int ernal quota

tion marks omitted); see also Stoneridge , supra , at 15 9; Dura Phar maceu ticals , 544 U. S., at 341–342. The Court also made clear that the presumption was just that, a n d could be r e butted by appropriate evidence. See Basic , supra , at 24 8. B It is undis puted that securities fraud plaintiffs mus t prove certa in things in order to in voke Ba sic ’s rebuttable presumption of reliance. It is co mmon grou nd, for exa m ple, that plaintiffs m u st demonstrate that the alleged misrepresentations were pub licly known (else how woul d the market take them into account?), that the stock trade d in an eff i cient market, and that the relevanttransaction6 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Opinion of theCourt 

### tookplace “between the time the misreprese ntations were made and the time the truth wa s revealed.” Basic , 4 85 U. S., at 24 8, n. 27; id. , at 241–247; see als o Stonerid ge , supra , at 15 9. Accordin g t o the Court of Appeals, EPJ Fund a l so had to establish loss causation at the certification stage to “tri g ger the fraud-on-the-market pre s umption.” 597 F. 3d, at 335 (internal quotation marks o m itted); see ibid. (EPJ Fund must “establish a causal link betweenthe alleged falsehoods and its loss es in order to invok e the fraud-on

the-market presumption”). The court determined that, in order to invoke a rebuttable presumption of reliance, EPJ Fund needed to prove that the decline in Halliburton’s stock was “b ecause of the correcti on to a prior misleading statement” and “tha tthe subsequ e nt loss could not other

wise be explained by some addi tional factors revealed then to the market.” Id. , at 336 (emphasis deleted). This is the loss causation requirement as we have described it. Se e Dura Phar maceu ticals , supra , at 342; see als o 15 U. S. C. §78u–4(b)(4). The Court of Appeals’ requirement is not justified by Basicor its logic. To begin, we have never before men

tioned loss causation as a precondi tion for invoking Ba sic ’s rebuttable presumption of relianc e. The ter m “loss cau s a tion” does not even appear in our Basicopinion. And f o r good reason: Loss cau s ation addresses ama tter different from wheth e r an investor relied on a misrepresentation, presumptively or otherwise, when buying or selling a stock. We have referred to the elementof reliance in a private Rule 1 0b–5 action as “transaction causation,” not loss causation. Dura Ph armaceuti c als, sup ra , at 341–342 (citing Bas i c , sup ra , a t248–249). Consistent withth at description, when considering whether a plaintiff has relied on amisrepresentation, we have typic a lly focused on facts su rrounding t h e investor’s decision to engage in7 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt 

### the transaction. See DuraPhar maceu ticals , supra , a t 342. Under Ba sic ’s fraud-on-the-market doctrine, an in

vestor presumptively relies on adefendant’s misrepre

sentation if that “information is reflected in [the] market price” of the stockat the timeof the relevant transactio n . See Basic , 4 85 U. S., at 247. Loss causation, by contrast, requires a plaintiff to show that a misrepresentation that affected the integrity of the mark et price also caus ed a subsequent economic loss. As we made clear in Dura Pharmac e utic als , th e fact that a stock ’ s “price on the date of purchase was inflated because of [a] misrepresentation” does not necessarily mean tha t the misstatement is the cause of a later decline in value. 544 U. S., at 342 (em p hasis deleted; internal quotation marks omitted). We observed that the drop could instea d be the result of other in tervening causes, such as “changed economic circumstances, changed investor expectations, new indust ry-specific or firm-s pecific facts, conditions, or other events.” Id. , at 3 42–343. If one of those factors were responsible for the loss or pa rt of it, a pla i ntiff would n o t be able to p r ove loss causation to that extent. This is true even if theinvestor purchased the stockat a distorted price, and thereby presumptively relied on th e misrepre

sentation reflected in that price. According to the Court of Appeals, however, an inability to prove loss causation would prevent a plaintiff from invoking th e rebuttable presumption of relia nce. Such a rule contra venes Basi c ’s fundam ental premise—that a n investor presumptively relies on a misrepresentation so long as it w a s reflected in the mar k et price atthe time of his transaction. The fa ct that a subsequent loss may have been caused by factors other thanthe revelat i on of a mi s representation has nothing to do with wheth e r an invest or relied on t h e misrepresentation in the first place, either directly or presumptiv ely throughthe fraud-on-the-market theory. Loss causation has n o logical conn ection to t h e8 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Opinion of theCourt 

### facts necessary to esta blish the efficient market predica t e to the fraud-on-the-market theory. The Court of Appeals erred by requiring EPJ Fun d to show los s causationas a condition of obt a ining class certification. C Halliburton concedes that securi ties fraud plaintiffs should not be requiredto prove loss causation in order t o invoke Basic ’s presumption of reliance or otherwise achieve class certification. See T r . of Oral Arg. 26–29. Halliburton nonetheles s defends t h e judgment below on the groundthat the Court of Appeals did not actuall y require plaintiffs to prove “lo ss causation” as we have used that term. See id. , at27 (“it’s not loss caus ation as this Court knows it in Dura”). Ac cordi n g to Halli burton, “loss causation” was merely “shorthand” for a different analysis. Brief for Respondents 18. Th e lower court’s actual in

quiry, Halliburton ins i sts, was whether EPJ Fund ha d demonstrated “price impact” —t h a t is, whether the alleged misrepresentations affected th e mark et price in the f i rst place. See, e.g. , id. , at 16–19, 24– 27, 50–51; s ee also Tr. of Oral Ar g. 2 7 (stating t hat the Court of App e als’ “test is simply pric e impact” and that E P J Fund’s “only burde n under the Fifth Circuit case law was to show price impact”).* “Price impa ct” simply r e fers to the effect of a misrepre

sentation on a stock price. Halliburton’s theo ry is that if a

——————

* Halliburtonfurther co nced es that, eveni f its conception of what the Cour t of Appeals me ant b y“loss c a usat ion” is c o r r e c t , the Cour t of Appeal s erred by pl acing the initi a l burden on EPJ Fu nd. See Tr. o f Or al Ar g . 29 (“ We ag r ee . . . t h at th e Fif t h Cir c u it pu t th e in itia l bu r d e n of production on the plainti ff, a n d t h a t ’s cont ra ry t o Basic” )

. Acco rdin g to Halli bu r t on , a plain t iff mu st prove price impact only after Basic ’s pr esu m ption h a s beensu c c e ssfu llyr e bu tted by the def e ndant. Tr. o f Or al Ar g . 28, 38–4 0. We ex pr ess n o v i ews onth e mer i ts of su c h a framework.9 Cite as: 56 3 U

. S. ____ (2011) Opinion of theCourt 

### misrepresentation does not affect market pri c e, an inves

tor cannot be said to have relied on the misrepresentation merely bec ause he purchased st ockat that price. If t h e price is una ffected by the fraud, the price do es not refl e c t the fraud. We do not accept Halli burton’ s wi shful interpretation of the Court o f Appeals’ o p inion. As we have explained, los s causation is a familia rand distinct concept in securities law; it is not price impact. While the opini o n below m a y include some langua ge consis tent with a “price impact” approach, see, e.g. , 597 F. 3d, at 336, we simply cannot ignore the Court of Appeals’ repeated and explicit refer

ences to “loss causation,” see id. , at 334 (thre e times), 33 4 n. 2, 335, 335 n. 10 (twice), 335 n. 11, 336, 336 n. 19, 33 6 n. 20, 337, 338, 341 (t wice), 341 n. 46, 342 n. 47, 343, 344 (three times). Whatever Halliburton thinks th e Court of Appeals meant to say, what it s a id was loss causation: “[EPJ Fund] was required to prove loss causa t ion, i.e., t hat the cor

rected trut hof the former falsehoods actually caused the stock price to fall and r e sulted inthe los s es.” 597 F. 3d, a t 334; see id. , at 335 (“we require plaintiffs to establish los s causation in order to trigger t h e fraud-on-the-market presumption” (interna l quotation marks om itted)). W e take the C o urt of Ap peals at its word. Ba sed on those words, the decision below cannot stand. * * * Because we conclude the Court of Appeals erred b y requiring EPJ Fund to prove loss causation at the certifi

cation stage, we need not, and do not, address any other question ab out Basic , its presumption, or howand when it may be rebutted. To the extent Halliburton has preserved any further arguments against class certification, they may be addressed in the first instance by the Court of Appeals on remand.10 ERICA P. JO HN FUND, INC. v. HALLIBURTON CO. Opinion of theCourt 

### The judgment of the Court of Appeals is v a cated, an d the case is remanded for further proceedings consistent with this opinion. It is so orde red.