Supreme Court Clarifies Pleading Requirements for Claims Premised on Statements of Opinion under Section 11 of the Securities Act of 1933
The Supreme Court issued an opinion yesterday in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, which clarified the pleading requirements for claims based on statements of opinion under § 11 of the Securities Act of 1933. The Court held that an opinion can be “an untrue statement of a material fact” under the first clause of § 11 only if subjectively disbelieved at the time it is made. However, the Court also held that an opinion can form the basis for omissions liability under the second clause of § 11 if a plaintiff can plead particular material facts underlying the opinion, the omission of which made the opinion misleading “to a reasonable person reading the statement fairly and in context.” While clarifying that sincerely held statements of opinion cannot be challenged as untrue statements of fact under the first clause of § 11, the Court’s decision exposes defendants to potential liability under the second clause of § 11 with respect to omissions claims for certain statements of opinion.