Eighth Circuit's Best Buy Decision Finds that Defendants Successfully Rebutted Presumption of Reliance by Showing a Lack of Price Impact

On April 12, 2016, the Eighth Circuit ruled in IBEW Local 98 Pension Fund v. Best Buy Co. that the defendants had successfully rebutted the fraud-on-the-market presumption at the class certification stage by demonstrating that Best Buy’s allegedly misleading statements did not impact the price of the company’s stock at the time of the alleged misstatements.  Cleary Gottlieb represented the U.S. Chamber of Commerce as an amicus curiae in support of Best Buy on this appeal.  The Best Buy ruling represents the first time an appellate court has applied the price impact analysis set out in the Supreme Court’s 2014 decision in Halliburton Co. v. Erica P. John Fund, Inc. and provides useful guidance to parties seeking to rebut the fraud-on-the-market presumption in other cases.