As previously discussed here, a very rare securities class action trial got underway in Manhatan in October 2009 against Vivendi. On January 29, 2010, the jury returned its verdict: the company acted recklessly and inflated its shares, and was liable on all 57 claims alleged against it.

Following the verdict, lawyers for the shareholders estimated that liability might reach as high as $9.3 billion if all shareholders submitted a valid claim. They based this on their estimate that more than 1 million shareholders were covered by the class definition, with about two-thirds of these investors living in France.

Vivendi recently took a shot at limiting its liability by arguing in a French court that the French investors should not be permitted to participate in the U.S. case, as class actions are not permitted in France on public policy grounds. Bloomberg reports that earlier this week, however, Judge Jean-Claude Magendie of the Paris Court of Appeal rejected Vivendi's argument, finding that "serious ties" existed between the French company, French investors, and the U.S. The court reportedly limited its opinion to finding that the French investors could participate, and not whether the French courts would enforce any eventual award.

Vivendi issued a statement following the French court's ruling that it "regrets that the Court of Appeal has decided not to make a ruling at this stage on the question of whether American class actions were in accordance with French public policy." The company has vowed to appeal the U.S. verdict.