Court weighs securities fraud class-action cases

The Supreme Court is considering whether to abandon a quarter-century of precedent and make it tougher for investors to band together to sue corporations for securities fraud.

The justices hear arguments Wednesday in an appeal by Halliburton Co. that seeks to block a class-action lawsuit claiming the energy services company inflated its stock price.

A group of investors says it lost money when Halliburton's stock price dropped after revelations the company misrepresented revenues, understated its liability in asbestos litigation and overstated the benefits of a merger.

Justices threw out the company's first attempt to block the lawsuit in 2011. But Halliburton is now urging the court to overturn a 25-year-old decision that sparked a tidal wave of securities-related, class-action lawsuits against publicly traded companies and has led to billions in settlements.

The court's 1988 decision in Basic v. Levinson says shareholders who claim they were defrauded by false statements in securities filings don't have to prove they actually relied on the statements. Rather, the court reasoned that any misrepresentation would be reflected in the current stock price. Even if investors are not aware of the misstatements, they are presumed to be aware of them because they affect the stock price.

This presumption, known as the "fraud-on-the-market theory," has become the driving force for modern class-action securities cases. But some economists have questioned whether this theory makes sense anymore, saying it doesn't account for the sometimes random and arbitrary nature of stock trading.

No mistrial for LA man who threw chair in court

A Los Angeles County judge has refused to declare a mistrial for a man who threw a chair and injured a police detective during his murder trial.

Superior Court Judge Ronald H. Rose also rejected a defense attorney's request Thursday for mental competency tests for Jesus Mendez.

But City News Service reports Mendez must be secured to a chair with handcuffs and restraining belt for the remainder of his trial.

Rose says the restraints must not be visible to the jury. Mendez had been appearing in court in civilian clothes without handcuffs to avoid prejudicing the jury.

Mendez threw the chair just after entering court Wednesday, hitting the detective in the head. She was hospitalized and in good condition.

Mendez is charged with fatally shooting a man during a robbery.

California appeals court upholds plastic bag ban

A California appeals court has upheld San Francisco's ban on single-use plastic bags that can serve as a precedent for other cases.

The San Francisco Chronicle reports the 1st District Court of Appeal issued its ruling last month and published it Friday as precedent binding on lower courts. The ordinance was passed in February 2012 and prohibits plastic bags that can be used only once and requires stores to charge 10 cents for recyclable plastic or paper bags.

A lawsuit by Save the Plastic Bag Coalition said plastic bags took more energy to produce than plastic and take up more space in landfills.

Similar measures have been adopted in about 50 cities and counties in California and have survived legal challenges. The state Supreme Court upheld a plastic-bag ban in 2011.

Va. court: Hookah lounge exempt from smoking ban

A divided Virginia Court of Appeals has ruled that a Blacksburg hookah lounge is exempt from the state's restaurant smoking ban.

In a 6-3 ruling Tuesday, the court said the She-Sha Cafe and Hookah Lounge is not subject to the ban because it's a retail tobacco store as well as a restaurant. She-Sha says most of its revenue comes from customers' use of hookahs - tall water pipes that are used to smoke flavored tobacco.

The state law regulating indoor public smoking covers restaurants but specifically exempts tobacco retailers. The court's majority cited that exemption in ruling in She-Sha's favor.

The decision reverses a three-judge panel's ruling that She-Sha is covered by the ban because it also serves food.

Planned Parenthood Asks Supreme Court's Help In Texas

Planned Parenthood is asking the Supreme Court to place Texas' new abortion restrictions on hold.

The group says in a filing with the high court Monday that more than a third of the clinics in Texas have been forced to stop providing abortions since a court order allowed the new restrictions to take effect Friday.

Planned Parenthood says that the 5th U.S. Circuit Court of Appeals went too far in overruling a trial judge who blocked the law's provision that requires doctors who perform abortions in clinics to have admitting privileges at a nearby hospital.

The filing was addressed to Justice Antonin Scalia, who oversees emergency matters from Texas.

Appeals court moves BP forward in settlement dispute

The April 2010 blowout of BP's Macondo well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf. Shortly after the disaster, BP agreed to create a $20 billion compensation fund that was administered at first by the Gulf Coast Claims Facility, led by attorney Kenneth Feinberg.

BP argued that Barbier and court-appointed claims administrator Patrick Juneau misinterpreted terms of the settlement. Plaintiffs' lawyers countered that BP undervalued the settlement and underestimated how many claimants would qualify for payments.

In the panel's majority opinion, Judge Edith Brown Clement said BP has consistently argued that the settlement's complex formula for compensating businesses was intended to cover "real economic losses, not artificial losses that appear only from the timing of cash flows."

"The interests of individuals who may be reaping windfall recoveries because of an inappropriate interpretation of the Settlement Agreement and those who could never have recovered in individual suits for failure to show causation are not outweighed by the potential loss to a company and its public shareholders of hundreds of millions of dollars of unrecoverable awards," Clement wrote.

Judge Leslie Southwick wrote a concurring opinion. Judge James Dennis wrote a partial dissent, largely disagreeing with the other two.

"Because BP has not satisfied its heavy burden of showing that a change in circumstances or law warranted the modifications it sought, the district court correctly affirmed the Administrator's decision rejecting BP's argument and actions to modify the agreement," Dennis wrote.

Court withdraws ruling in BP insurance dispute

A federal appeals court reversed course Thursday on its earlier ruling favoring BP in a multimillion-dollar insurance dispute, handing at least a temporary setback to the energy giant as it seeks to defray some of the enormous costs associated with the huge 2010 Gulf oil spill.

BP has argued that it is entitled to a portion of $750 million in coverage from a drilling contractor's insurance policies to help the London-based multinational help pay pollution-related costs following the explosion, fire and spill in the Gulf of Mexico.

BP leased the drilling rig that exploded from Transocean Ltd. and required by contract that the Swiss-based drilling company maintain minimum insurance coverage for BP's benefit. Transocean's policy with Ranger Insurance Ltd. provided at least $50 million in coverage, while its policies with several "excess liability" insurers added at least another $700 million in coverage.

BP contends it is entitled to coverage under those Transocean policies as an "additional insured" party, but U.S. District Judge Carl Barbier rejected the company's interpretation of the policy language in a November 2010 ruling. Then the 5th U.S. Circuit Court of Appeals in New Orleans reversed Barbier's ruling on March 1 in a decision favoring BP.

On Thursday, a three-judge panel of the same New Orleans based appeals court said the outcome of the dispute isn't clear and it would seek answers from the Texas Supreme Court to two questions that could help the federal appeals court ultimately decide the case. For now, Barbier's ruling against BP stands.