Statements of Opinion

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In the opinion issued yesterday in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (“Omnicare”), the Supreme Court rejected the two extremes advocated by the parties regarding how the truth or falsity of statements of opinion should be considered under the securities laws, and instead adopted the middle path advocated in…

This year will be remembered as the year of the Super Bowl of securities litigation, Halliburton Co. v. Erica P. John Fund, Inc. (“Halliburton II”), 134 S. Ct. 2398 (2014), the case that finally gave the Supreme Court the opportunity to overrule the fraud-on-the-market presumption of reliance, established in 1988 in Basic v.

Monday’s oral argument before the Supreme Court in Laborers District Counsel Construction Industry Pension Fund v. Omnicare, Inc. (“Omnicare”) was remarkable in that, as Omnicare attorney Kannon Shanmugam noted, it was the “rare case in which none of the parties is defending the reasoning of the court of appeals below.”

As we explained in last…

My partner Claire Loebs Davis and I are honored to be working with Washington Legal Foundation on a U.S. Supreme Court amicus brief in the Omnicare securities class action.  Omnicare concerns what makes a statement of opinion false.

As many of our readers know, Claire and I feel that improvement in the law on statements…

In 1995, public companies and their directors and officers received one of the greatest statutory gifts in the history of American corporate law:  the Private Securities Litigation Reform Act.  The Reform Act established heightened standards for pleading falsity and scienter, among other protections, to allow for dismissal before discovery in a fair percentage of cases. …

In defending a securities class action, a motion to dismiss is almost automatic, and in virtually all cases, it makes good strategic sense.  In most cases, there are only four main arguments:

  • The complaint hasn’t pleaded a false or misleading statement
  • The challenged statements are protected by the Safe Harbor for forward-looking statements
  • The

…

When is an opinion a false or misleading statement?  If a company official says “I think the deal is fair,” is it a false statement just because the deal is objectively unfair?  Or only if the official also did not subjectively believe the deal was fair when he voiced that opinion?

With the Sixth Circuit’s…