WLF Asks Eleventh Circuit to Grant Review of Class Certification That Misapplies Basic Presumption

“Making the Basic presumption essentially irrebuttable multiplies settlement pressure and imposes unnecessary costs on American businesses.”
—Cory Andrews, WLF General Counsel & Vice President of Litigation

Click here for WLF’s brief.

WASHINGTON, DC—Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Eleventh Circuit to grant a Rule 23(f) petition for permission to appeal from class certification. In its amicus brief, WLF contends that the district court misapplied the Supreme Court’s Goldman decision, denying defendants a meaningful opportunity to rebut the Basic presumption and burdening companies with unwarranted costs. WLF’s brief was prepared with the pro bono support of James Kramer and Danny Rubens of Orrick, Herrington & Sutcliffe LLP.

The case arises from investor claims that Norfolk Southern’s statements about operating “safely” while implementing its “Precision Scheduled Railroading” strategy were exposed as false by the East Palestine derailment. The U.S. District Court for the Northern District of Georgia correctly held that statements about company values were too generic to affect price. It then certified a class based on so-called “operational” statements that paired accurate descriptions of train length and workforce size with safety assurances. The court found a “plausible” linkage to later disclosures that connected the strategy to increased safety risks.

In its amicus brief, WLF argues that Goldman requires a preponderance showing and a common-sense assessment of whether generic statements match specific disclosures. Mere subject-matter overlap cannot supply price impact when the challenged operational facts are not alleged to be false. As WLF’s brief contends, these errors fuel event-driven litigation that rarely reaches trial, coerce settlements, and discourage useful corporate disclosures.