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.

Pakistan court dismisses Musharraf medical request

A Pakistani court hearing the case against former military ruler Pervez Musharraf on charges of high treason rejected Friday a request that he be allowed to go abroad for treatment, his lawyer and a court official said.

Instead, they said, it issued an arrest warrant for the retired general. But the warrant is "bailable" — meaning he can avoid jail by applying for bail and depositing a bond of 2.5 million rupees (about $20,000). The court said it didn't have the authority to remove his name from the exit control list which restricts him from going abroad.

While Musharraf can't leave the country, it's unlikely he would actually end up in handcuffs immediately and still unclear whether he will ever appear in court — a scene that could be humiliating not just to Musharraf, but to the country's politically powerful military.

The judges' decision is the latest in the legal battles that Musharraf has faced ever since returning to his homeland in March 2013 to take part in the country's elections. Instead of returning to a hero's welcome, he was almost immediately hit with a barrage of cases, threats from the Pakistani Taliban and was disbarred from running in the election.

A lawyer for Musharraf, Mohammed Ali Saif, said the judges ruled that Musharraf must appear in court on Feb. 7.

"We are of the view that no reasonable excuse has been offered to justify the failure of the accused to appear before the court, there is no alternate except to issue a bailable warrant of arrest for the accused," said the court registrar Abdul Ghani Soomro, reading from the court's decision.

Musharraf seized power in a 1999 coup, but became deeply unpopular and was forced to step down in 2008. He later left the country. The high treason case stems from his 2007 decision to impose a state of emergency and detain judges.

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.

Judge ousts defendant twice from Guantanamo court

The military judge presiding over the Sept. 11 war crimes tribunal at Guantanamo ejected one defendant from the courtroom twice Tuesday for speaking out of turn, adding a bit of drama to an otherwise dry pretrial motions hearing at the U.S. naval base in Cuba.

Ramzi Binalshibh, one of five Guantanamo prisoners charged with orchestrating the Sept. 11 terrorist attack, refused repeated warnings to stop trying to address the judge about what he claims are efforts by guards to keep him awake at night with banging sounds inside his cell.

But the judge, whose courtroom was repeatedly disrupted when the defendants were arraigned in May 2012, was having none of it. Army Col. James Pohl ordered troops to remove Binalshibh and place him in a holding cell.

Then the same scene repeated itself in the afternoon session, and the judge warned it would happen again if the defendant tried again on Wednesday. "If he is disruptive he will be escorted from the courtroom," Pohl told the lawyers for Binalshibh.

He also said he was concerned that the prisoner might shout out classified information, prompting courtroom censors to cut the sound. "I don't know what he'll say," he said.

Both removals occurred as the judge asked Binalshibh if he understood he has the right to be absent from the remainder of the pretrial motions hearing this week. The four other defendants also answered in the affirmative.

Binalshibh used the question as an opportunity to repeat claims that prison authorities use sounds and vibrations to keep him awake at night inside Camp 7, the high-security section of Guantanamo where he and the other defendants in the Sept. 11 case are held. Prosecutors say they have looked into the matter and were assured that no noises are being made.

Federal appeals court halts horse slaughterhouses

A federal appeals court on Monday temporarily halted plans by companies in New Mexico and Missouri to begin slaughtering horses, continuing on-again, off-again efforts to resume domestic equine slaughter two years after Congress lifted a ban on the practice.

The 10th U.S. Circuit Court of Appeals in Denver issued a temporary injunction barring the Department of Agriculture from inspecting the plants, which were gearing up to open in the coming days after a federal judge in Albuquerque on Friday dismissed a lawsuit by The Humane Society of the United States. The Humane Society and other animal protection groups alleged the department failed to conduct proper environmental studies when it issued permits to the slaughterhouses.

The Humane Society filed an immediate appeal and won an emergency injunction.

"Horse slaughter is a predatory, inhumane business, and we are pleased to win another round in the courts to block killing of these animals on American soil for export to Italy and Japan," said Wayne Pacelle, president and CEO of The Humane Society of the United States. "Meanwhile, we are redoubling our efforts in Congress to secure a permanent ban on the slaughter of our horses throughout North America."

Blair Dunn, who represents Valley Meat Co. of Roswell, N.M., and Rains Natural Meats of Gallatin, Mo., emphasized the order was temporary.

Court favors Abercrombie in Okla. suit over hijab

A federal appeals court has dismissed claims by an Oklahoma woman who says she wasn't hired by Abercrombie & Fitch because her headscarf conflicted with the retailer's dress code, which has since been changed.

A federal judge initially sided with the Equal Employment Opportunity Commission, which filed the lawsuit on behalf of Samantha Elauf. The EEOC alleged that Elauf wasn't hired in 2008 at an Abercrombie store in Tulsa's Woodland Hills Mall because her hijab violated the clothing retailer's "Look Policy."

The 10th U.S. Circuit Court of Appeals reversed that decision Tuesday. The court said Elauf never told Abercrombie she needed a religious accommodation, even though she was wearing the headscarf during her interview.

The Ohio-based company changed its policy three years ago. It recently settled similar lawsuits in California.

Court strikes down Arizona 20-week abortion ban

A federal court in San Francisco Tuesday struck down Arizona's ban on abortions after 20 weeks of pregnancy.
The 9th U.S. Circuit Court of Appeals ruled that the law violates a string of U.S. Supreme Court rulings starting with Roe v. Wade that guarantees a woman's right to an abortion before a fetus is able to survive outside the womb. That's generally considered to be about 24 weeks. Normal pregnancies run about 40 weeks
Several states have enacted similar bans starting at 20 weeks. But the 9th Circuit's ruling is binding only in the nine Western states under the court's jurisdiction. Idaho is the only other state in the region covered by the 9th Circuit with a similar ban.
A trial judge had ruled that the ban could take effect. U.S. District Judge James Teilborg ruled it was constitutional, partly because of concerns about the health of women and possible pain for fetuses.
But abortion-rights groups appealed that decision, saying the 20-week ban would not give some women time to carefully decide whether to abort problem pregnancies.