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On August 20, 2018, the Second Circuit summarily affirmed dismissal of a securities fraud action against a leading hotel chain “for substantially the same reasons” set forth in the district court’s order. Police & Fire Ret. Sys. of the City of Detroit v. La Quinta Holdings, 735 F. App’x 11 (Mem) (2d Cir. 2018).[1]

The district court dismissed the suit with prejudice on the grounds that the company had adequately disclosed each of the risks at issue, including the impact of falling oil prices, the need for renovations at certain properties, the transition of the company’s call center, and the sale of certain hotels. Police & Fire Ret. Sys. of the City of Detroit v. La Quinta Holdings, 2017 WL 4082482 (S.D.N.Y. 2017). The district court reasoned that “[w]hen evaluating whether a company provided sufficient disclosures,” a court “should consider not only the disclosures the company makes, but also information already in the public domain and facts known or reasonably available to the shareholders.” The district court found meritless plaintiffs’ allegations that certain “disclosures should have been made earlier.” The court explained that “[m]ere allegations that statements in one report should have been made in earlier reports do not make out a claim of securities fraud.’” Finally, the district court dismissed claims in connection with what the court found to be a statement of opinion made by the hotel chain’s then-CEO, based on its determination that the opinion was not misleading when considered with other “representations together and in context.”