Omnicare, Inc. v. Laborers Dist. Council Constr. Industry Pension Fund
135 S. Ct. 1318
| SCOTUS | 2015Background
- Two parties dispute Securities Act §11 liability for a registration statement containing two statements of legal compliance.
- Funds allege Omnicare’s opinions about legal compliance were untrue statements of material fact or omissions of facts necessary to make them not misleading.
- District court dismissed; held that belief-based legal opinions were not actionable absent proof of knowledge of illegality.
- Sixth Circuit reversed, holding that objective falsity of the opinion could suffice under §11’s false-statement theory.
- Court grants certiorari to distinguish misstatements of opinion from omissions and remands for determination of omissions liability.
- Opinion clarifies distinctions between statements of fact and opinion, and confines liability under §11 accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether opinion statements can be untrue statements of fact | Funds contend opinions can be true/false facts. | Omnicare argues opinions aren’t factual statements. | No; opinions fail §11(a) unless not sincerely held or contain embedded false facts. |
| Whether omissions can render an opinion misleading under §11 | Funds rely on omissions to render opinions misleading. | Omnicare contends omissions cannot mislead when opinion is sincere. | Remand to assess if omissions render the opinion misleading in context. |
| What standard governs misleadings for opinions with omissions | Context and reasonable investor perspective should reveal basis for opinion. | Investment context should not import a strict factual standard to opinions. | Contextual, investor-based inquiry; determine material omissions and basis for the opinion. |
| Whether the complaint properly alleged an omission or required repleading | Alleged attorney warning about anti-kickback risk omitted from filing. | Omissions theory not properly framed below; no right standard applied. | Remand with instructions to determine if omitted fact would be material and make the opinion misleading. |
Key Cases Cited
- Pinter v. Dahl, 487 U.S. 622 (1988) (registration-liability framework for disclosures and scienter considerations (example))
- Herman & MacLean v. Huddleston, 459 U.S. 375 (1983) (§11 liability even for innocent misstatements or omissions; strict liability)
- Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083 (1991) (expressions of opinion and implied facts; exceptions for expert or trusted relationships)
- TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976) (objective standard for materiality/ misleading omissions)
- In re Sofamor Danek Group Inc., 123 F.3d 394 (6th Cir. 1997) (contextual treatment of opinions and misrepresentations)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility; not mere boilerplate)