OMNICARE, INC., ET AL. v. LABORERS DISTRICT COUNCIL CONSTRUCTION INDUSTRY PENSION FUND ET AL.
No. 13-435
SUPREME COURT OF THE UNITED STATES
Argued November 3, 2014—Decided March 24, 2015
575 U. S. ____ (2015)
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
Syllabus
OMNICARE, INC., ET AL. v. LABORERS DISTRICT COUNCIL CONSTRUCTION INDUSTRY PENSION FUND ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
The Securities Act of 1933 requires that a company wishing to issue securities must first file a registration statement containing specified information about the issuing company and the securities offered. See
Petitioner Omnicare, a pharmacy services company, filed a registration statement in connection with a public offering of common stock. In addition to the required disclosures, the registration stаtement contained two statements expressing the company‘s opinion that it was in compliance with federal and state laws. After the Federal Government filed suit against Omnicare for allegedly receiving kickbacks from pharmaceutical manufacturers, respondents, pension funds that purchased Omnicare stock (hereinafter Funds), sued Omnicare under §11. They claimed that Omnicare‘s legal-compliance statements constituted “untrue statement[s] of material fact” and that Omnicare “omitted to state [material] facts necessary” to make those statements not misleading.
Held:
1. A statement of opinion does not constitute an “untrue statement of . . . fact” simply because the stated opinion ultimately proves incorrect. The Sixth Circuit‘s contrary holding wrongly conflates facts and opinions. A statement of fact expresses certainty about a thing, whereas a statement of opinion conveys only an uncertain view as to that thing. Section 11 incorporates that distinction in its first clause by exposing issuers to liability only for “untrue statement[s] of . . . fact.”
But opinion statements are not wholly immune from liability under §11‘s first clause. Every such statement explicitly affirms one fact: that the speaker actually holds the stated belief. A statement of opinion thus qualifies as an “untrue statement of . . . fact” if that fact is untrue—i.e., if the opinion expressed was not sincerely held. In addition, opinion statements can give rise to false-statement liability under §11 if they contain embedded statements of untrue facts. Here, however, Omnicare‘s sincerity is not contested and the statements at issue are pure opinion statements. The Funds thus cannot establish liability under §11‘s first clause. Pp. 6–10.
2. If a registration statement omits material facts about the issuer‘s inquiry into, or knowledge concerning, a statement of opinion, and if those facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement itself, then §11‘s omissions clause creates liability. Pp. 10–20.
(a) For purposes of §11‘s omissions clаuse, whether a statement is “misleading” is an objective inquiry that depends on a reasonable investor‘s perspective. Cf. TSC Industries, Inc. v. Northway, Inc., 426 U. S. 438, 445. Omnicare goes too far by claiming that no reasonable person, in any context, can understand a statement of opinion to convey anything more than the speaker‘s own mindset. A reasonable investor may, depending on the circumstances, understand an opinion statement to convey facts about the speaker‘s basis for holding that view. Specifically, an issuer‘s statement of opinion may fairly imply
An opinion statement, however, is not misleading simply because the issuer knows, but fails to disclose, some fact cutting the other way. A reasonable investor does not expect that every fact known to an issuer supports its opinion statement. Moreover, whether an omission makes an expression of opinion misleading always depends on context. Reasonable investors understand opinion statements in light of the surrounding text, and §11 creates liability only for the omission of material facts that cannot be squared with a fair reading of the registration statement as a whole. Omnicare‘s arguments to the contrary are unavailing. Pp. 10–19.
(b) Because neither court below considered the Funds’ omissions theory under the right standard, this case is remanded for a determination of whether the Funds have stated a viable omissions claim. On remand, the court must review the Funds’ complaint to determine whether it adequately alleges that Omnicare omitted from the registration statement some specific fact that would have been material to a reasonable investor. If so, the court must decide whether the alleged omission rendered Omnicare‘s opinion statements misleading in context. Pp. 19–20.
719 F. 3d 498, vacated and remanded.
KAGAN, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, GINSBURG, BREYER, ALITO, and SOTOMAYOR, JJ., joined. SCALIA, J., filed an opinion concurring in part and concurring in the judgment. THOMAS, J., filed an opinion concurring in the judgment.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 13–435
OMNICARE, INC., ET AL., PETITIONERS v. LABORERS DISTRICT COUNCIL CONSTRUCTION INDUSTRY PENSION FUND ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
[March 24, 2015]
JUSTICE KAGAN delivered the opinion of the Court.
Before a company may sell securities in interstate commerce, it must file a registration statement with the Securities and Exchange Commission (SEC). If that document either “contain[s] an untrue statement of a material fact” or “omit[s] to state a material fact . . . necessary to makе the statements therein not misleading,” a purchaser of the stock may sue for damages.
I
The Securities Act of 1933,
Section 11 of the Act promotes compliance with these disclosure provisions by giving purchasers a right of action against an issuer or designated individuals (directors, partners, underwriters, and so forth) for material misstatements or omissions in registration statements. As relevant here, that section provides:
“In case any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring such security . . . [may] sue.”
§77k(a) .
Section 11 thus creates two ways to hold issuers liable for the contents of a registration statement—one focusing on what the statement says and the other on what it leaves out. Either way, the buyer need not prove (as he must to establish certain other securities offenses) that the defendant acted with any intent to deceive or defraud. Herman & MacLean v. Huddleston, 459 U. S. 375, 381–382 (1983).
This case arises out of a registration statement that petitioner Omnicare filed in connection with a public offering of common stock. Omnicare is the nation‘s largest provider of pharmacy services for residents of nursing homes. Its registration statement contained (along with all mandated disclosures) analysis of the effects of various federal and state laws on its business model, including its acceptance of rebates from pharmaceutical manufacturers. See, e.g., App. 88–107, 132–140, 154–166. Of significance here, two sentences in the registration statement expressed Omnicare‘s view of its compliance with legal
- “We believe our contract arrangements with other healthcare providers, our pharmaceutical suppliers and our pharmacy practices are in compliance with applicable federal and state laws.” Id., at 95.
- “We believe that our contracts with pharmaceutical manufacturers are legally and economically valid arrangements that bring value to the healthcare system and the patients that we serve.” Id., at 137.
Accompanying those legal opinions were some caveats. On the same page as the first statement above, Omnicare mentioned several state-initiated “enforcement actions against pharmaceutical manufacturers” for offering payments to pharmacies that dispensed their products; it then cautioned that the laws relating to that practice might “be interpreted in the future in a manner inconsistent with our interpretation and application.” Id., at 96. And adjacent to the second statement, Omnicare noted that the Federal Government had expressed “significant concerns” about some manufacturers’ rebates to pharmacies and warned that business might suffer “if these price concessions were no longer provided.” Id., at 136–137.
Respondents here, pension funds that purchased Omnicare stock in the public offering (hereinafter Funds), brought suit alleging that the company‘s two opinion statements about legal compliance give rise to liability under §11. Citing lawsuits that the Federal Government later pressed against Omnicare, the Funds’ complaint maintained that the company‘s receipt of payments from drug manufacturers violated anti-kickback laws. See id., at 181–186, 203–226. Accordingly, the complaint asserted, Omnicarе made “materially false” representations about legal compliance. Id., at 274. And so too, the complaint continued, the company “omitted to state [material] facts necessary” to make its representations not misleading.
The District Court granted Omnicare‘s motion to dismiss. See Civ. No. 2006–26 (ED Ky., Feb. 13, 2012), App. to Pet. for Cert. 28a, 38a–40a, 2012 WL 462551, *4–*5. In the court‘s view, “statements regarding a company‘s belief as to its legal compliance are considered ‘soft’ information” and are actionable only if those who made them “knew [they] were untrue at the time.” App. to Pet. for Cert. 38a. The court concluded that the Funds’ complaint failed to meet that standard because it nowhere claimed that “the company‘s officers knew they were violating the law.” Id., at 39a. The Court of Appeals for the Sixth Circuit reversed. See 719 F. 3d 498 (2013). It acknowledged that the two statements highlighted in the Funds’ complaint expressed Omnicare‘s “opinion” of legal compliance, rather than “hard facts.” Id., at 504 (quoting In re Sofamor Danek Group Inc., 123 F. 3d 394, 401–402 (CA6 1997)). But even so, the court held, the Funds had to allege only that the stated belief was “objectively false“; they did not need to contend that anyone at Omnicare “disbelieved [the opinion] at the time it was expressed.” 719 F. 3d, at 506 (quoting Fait v. Regions Financial Corp., 655 F. 3d 105, 110 (CA2 2011)).
We granted certiorari, 571 U. S. ____ (2014), to consider how §11 pertains to statements of opinion. We do so in two steps, corresponding to the two parts of §11 and the
The Sixth Circuit held, and the Funds now urge, that a statement of opinion that is ultimately found incorrect—еven if believed at the time made—may count as an “untrue statement of a material fact.”
But that argument wrongly conflates facts and opinions. A fact is “a thing done or existing” or “[a]n actual happening.” Webster‘s New International Dictionary 782 (1927). An opinion is “a belief[,] a view,” or a “sentiment which the mind forms of persons or things.” Id., at 1509. Most important, a statement of fact (“the coffee is hot“) expresses certainty about a thing, whereas a statement of opinion (“I think the coffee is hot“) does not. See ibid. (“An opinion, in ordinary usage . . . does not imply definiteness . . . or certainty“); 7 Oxford English Dictionary 151 (1933) (an opinion “rest[s] on grounds insufficient for complete demonstration“). Indeed, that difference between the two is so ingrained in our everyday ways of speaking and thinking as to make resort to old dictionaries seem a mite silly. And Congress effectively incorporated just that distinction in §11‘s first part by exposing issuers tо liability not for “untrue statement[s]” full stop (which would have included ones of opinion), but only for “untrue statement[s] of . . . fact.”
Consider that statutory phrase‘s application to two hypothetical statements, couched in ways the Funds claim
That still leaves some room for §11‘s false-statement provision to apply to expressions of opinion. As even Omnicare acknowledges, every such statement explicitly affirms one fact: that the speaker actually holds the stated belief. See Brief for Petitioners 15–16; W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the Law of Torts §109, p. 755 (5th ed. 1984) (Prosser and Keeton) (“[A]n expression of opinion is itself always a statement of . . . the fact of the belief, the existing state of
In addition, some sentences that begin with opinion words like “I believe” contain embedded statements of fact—as, once again, Omnicare recognizes. See Reply Brief 6. Suppose the CEO in our running hypothetical said: “I believe our TVs have the highest resolution available because we use a patented technology to which our competitors do not have access.” That statement may be read to affirm not only the speaker‘s state of mind, as
But the Funds cannot avail themselves of either of those ways of demonstrating liability. The two sentences to which the Funds object are pure statements of opinion: To simplify their content only a bit, Omnicare said in each that “we believe we are obeying the law.” And the Funds do not contest that Omnicare‘s opinion was honestly held. Recall that their complaint explicitly “exclude[s] and disclaim[s]” any allegation sounding in fraud or deception. App. 273. What the Funds instead claim is that Omnicare‘s belief turned out to be wrong—that whatever the company thought, it was in fact violating anti-kickback laws. But that allegation alone will not give rise to liability under §11‘s first clause because, as we have shown, a sincere statement of pure opinion is not an “untrue statement of material fact,” regardless whether an investor can ultimately prove the belief wrong. That clause, limited as it is to factual statements, does not allow investors to second-guess inherently subjective and uncertain assessments. In other words, the provision is not, as the Court of Appeals and the Funds would have it, an invitation to Monday morning quarterback an issuer‘s opinions.
A
That conclusion, however, does not end this case because the Funds also rely on §11‘s omissions provision, alleging that Omnicare “omitted to state facts necessary” to make its opinion on legal compliance “not misleading.” App. 273; see
Omnicare claims that is just not possible. On its view, no reasonable person, in any context, can understand a pure statement of opinion to convey anything more than the speaker‘s own mindset. See Reply Brief 5–6. As long as an opinion is sincerely held, Omnicare argues, it cannot mislead as to any matter, regardless what related facts the speaker has omitted. Such statements of belief (concludes Omnicare) are thus immune from liability under §11‘s second part, just as they are under its first.4
But Omnicare takes its point too far, because a reasonable investor may, depending on the circumstances, understand an opinion statement to convey facts about how the speaker has formed the opinion—or, otherwise put, about the speaker‘s basis for holding that view. And if the real facts are otherwise, but not provided, the opinion statement will mislead its audience. Consider an unadorned
These principles are not unique to §11: They inhere, too, in much common law respecting the tort of misrepresentation.9 The Restatement of Torts, for example, recognizes that “[a] statement of opinion as to facts not disclosed and not otherwise known to the recipient may” in some circumstances reasonably “be interpreted by him as an implied statement” that the speaker “knows facts sufficient to justify him in forming” the opinion, or that he at least
Omnicare argues, in response, that applying §11‘s omissions clause in the way we have described would have “adverse policy consequences.” Reply Brief 17 (capitalization omitted). According to Omnicare, any inquiry into the issuer‘s basis for holding an opinion is “hopelessly amorphous,” threatening “unpredictable” and possibly “massive” liability. Id., at 2; Brief for Petitioners 34, 36. And because that is so, Omnicare claims, many issuers will choose not to disclose opinions at all, thus “depriving [investors] of potentially helpful information.” Reply Brief 19; see Tr. of Oral Arg. 59–61.
But first, that claim is, just as Omnicare labels it, one of “policy“; and Congress gets to make policy, not the courts. The decision Congress made, for the reasons we have indicated, was to extend §11 liability to all statements rendered misleading by omission. In doing so, Congress no doubt made §11 less cut-and-dry than a law prohibiting only false factual statements. Section 11‘s omissions clause, as applied to statements of bоth opinion and fact, necessarily brings the reasonable person into the analysis, and asks what she would naturally understand a statement to convey beyond its literal meaning. And for expressions of opinion, that means considering the foundation she would expect an issuer to have before making the statement. See supra, at 11–12. All that, however, is a feature, not a bug, of the omissions provision.
Moreover, Omnicare way overstates both the looseness of the inquiry Congress has mandated and the breadth of liability that approach threatens. As we have explained, an investor cannot state a claim by alleging only that an opinion was wrong; the complaint must as well call into question the issuer‘s basis for offering the opinion. See
The District Court granted Omnicare‘s motiоn to dismiss. See Civ. No. 2006–26 (ED Ky., Feb. 13, 2012), App. to Pet. for Cert. 28a, 38a–40a, 2012 WL 462551, *4–*5. In the court‘s view, “statements regarding a company‘s belief as to its legal compliance are considered ‘soft’ information” and are actionable only if those who made them “knew [they] were untrue at the time.” App. to Pet. for Cert. 38a. The court concluded that the Funds’ complaint failed to meet that standard because it nowhere claimed that “the company‘s officers knew they were violating the law.” Id., at 39a. The Court of Appeals for the Sixth Circuit reversed. See 719 F. 3d 498 (2013). It acknowledged that the two statements highlighted in the Funds’ complaint expressed Omnicare‘s “opinion” of legal compliance, rather than “hard facts.” Id., at 504 (quoting In re Sofamor Danek Group Inc., 123 F. 3d 394, 401–402 (CA6 1997)). But even so, the court held, the Funds had to allege only that the stated belief was “objectively false“; they did not need to contend that anyone at Omnicare “disbelieved [the opinion] at the time it was expressed.” 719 F. 3d, at 506 (quoting Fait v. Regions Financial Corp., 655 F. 3d 105, 110 (CA2 2011)).
We granted certiorari, 571 U. S. ____ (2014), to consider how §11 pertains to statements of opinion. We do so in two steps, corresponding to the two parts of §11 and the
Omnicare argues, in response, that applying §11‘s omissions clause in the way we have described would have “adverse policy consequences.” Reply Brief 17 (capitalization omitted). According to Omnicare, any inquiry into the issuer‘s basis for holding an opinion is “hopelessly amorphous,” threatening “unpredictable” and possibly “massive” liability. Id., at 2; Brief for Petitioners 34, 36. And because that is so, Omnicare claims, many issuers will choose not to disclose opinions at all, thus “depriving [investors] of potentially helpful information.” Reply Brief 19; see Tr. of Oral Arg. 59–61.
But first, that claim is, just as Omnicare labels it, one of “policy“; and Congress gets to make policy, not the courts. The decision Congress made, for the reasons we have indicated, was to extend §11 liability to all statements rendered misleading by omission. In doing so, Congress no doubt made §11 less cut-and-dry than a law prohibiting only false factual statements. Section 11‘s omissions clause, as applied to statements of both opinion and fact, necessarily brings the reasonable person into the analysis, and asks what she would naturally understand a statement to convey beyond its literal meaning. And for expressions of opinion, that means considering the foundation she would expect an issuer to have before making the statement. See supra, at 11–12. All that, however, is a feature, not a bug, of the omissions provision.
Moreover, Omnicare way overstates both the looseness of the inquiry Congress has mandated and the breadth of liability that approach threatens. As we have explained, an investor cannot state a claim by alleging only that an opinion was wrong; the complaint must as well call into question the issuer‘s basis for offering the opinion. See
Nor does the inquiry such a complaint triggers ask anything unusual of courts. Numerous legal rules hinge on what a reasonable person would think or expect. In requiring courts to view statements of opinion from an ordinary investor‘s perspective,
Finally, we see no reason to think that liability for misleading opinions will chill disclosures useful to investors. Nothing indicates that
B
Our analysis on this score counsels in favor of sending the case back to the lower courts for decision. Neither court below considered the Funds’ omissions theory with the right standard in mind—or indeed, even recognized the distinct statutory questions that theory raises. See supra, at 4-5. We therefore follow our ordinary practice of remanding for a determination of whether the Funds have stated a viable omissions claim (or, if not, whether they should have a chance to replead).
In doing so, however, we reemphasize a few crucial points pertinent to the inquiry on remand. Initially, as we have said, the Funds cannot proceed without identifying one or more facts left out of Omnicare‘s registration statement. See supra, at 17-18. The Funds’ recitation of the statutory language—that Omnicare “omitted to state facts necessary to make the statements made not misleading“—is not sufficient; neither is the Funds’ conclusory allegation that Omnicare lacked “reasonable grounds for the belief” it stated respecting legal compliance. App. 273-274. At oral argument, however, the Funds highlighted another, more specific allegation in their complaint: that an attorney had warned Omnicare that a
Assuming the Funds clear those hurdles, the court must ask whether the alleged omission rendered Omnicare‘s legal complianсe opinions misleading in the way described earlier—i.e., because the excluded fact shows that Omnicare lacked the basis for making those statements that a reasonable investor would expect. See supra, at 11-12. Insofar as the omitted fact at issue is the attorney‘s warning, that inquiry entails consideration of such matters as the attorney‘s status and expertise and other legal information available to Omnicare at the time. See supra, at 13. Further, the analysis of whether Omnicare‘s opinion is misleading must address the statement‘s context. See supra, at 14. That means the court must take account of whatever facts Omnicare did provide about legal compliance, as well as any other hedges, disclaimers, or qualifications it included in its registration statement. The court should consider, for example, the information Omnicare offered that States had initiated enforcement actions against drug manufacturers for giving rebates to pharmacies, that the Federal Government had expressed concerns about the practice, and that the relevant laws “could” be interpreted in the future in a manner” that would harm Omnicare‘s business. See App. 95-96, 136–137; supra, at 3.
*
*
With these instructions and for the reasons stated, we vacate the judgment below and remand the case for further proceedings.
It is so ordered.
The common law recognized that most listeners hear “I believe,” “in my estimation,” and other related phrases as disclaiming the assertion of a fact. Hence the (somewhat overbroad) common-law rule that a plaintiff cannot establish a misrepresentation claim “for misstatements of opinion, as distinguished from those of fact.” W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on
In a few areas, the common law recognized the possibility that a listener could reasonably infer from an expression of opinion not only (1) that the speaker sincerely held it, and (2) that the speaker knew of no facts incompatible with the opinion, but also (3) that the speaker had a reasonable basis for holding the opinion. This exceptional recognition occurred only where it was “very reasonable or probable” that a listener should place special confidence in a speaker‘s opinion. Prosser & Keeton §109, at 760-761. This included two main categories, both of which were carve-outs from the general rule that “the ordinary man has a rеasonable competence to form his own opinion,” and “is not justified in relying [on] the . . . opinion” of another. Restatement of Torts §542, Comment a, at 95. First, expressions of opinion made in the context of a relationship of trust, such as between doctors and patients. Second, expressions of opinion made by an expert in his capacity as an expert (for example, a jeweler‘s statement of opinion about the value of a diamond). These exceptions
The Court‘s expansive application of
It is also incompatible with common sense. It seems to me strange to suggest that a statement of opinion as generic as “we believe our conduct is lawful” conveys the implied assertion of fact “we have conducted a meaningful legal investigation before espousing this opinion.” It is strange to ignore the reality that a director might rely on industry practice, prior experience, or advice from regulators—rather than a meaningful legal investigation—in concluding the firm‘s conduct is lawful. The effect of the Court‘s rule is to adopt a presumption of expertise on all
It is reasonable enough to adopt such a presumption for those matters that are required to be set forth in a registration statement. Those are matters on which the management of a corporation are experts. If, for examplе, the registration statement said “we believe that the corporation has $5,000,000 cash on hand,” or “we believe the corporation has 7,500 shares of common stock outstanding,” the public is entitled to assume that the management has done the necessary research, so that the asserted “belief” is undoubtedly correct. But of course a registration statement would never preface such items, within the expertise of the management, with a “we believe that.” Full compliance with the law, however, is another matter. It is not specifically required to be set forth in the statement, and when management prefaces that volunteered information with a “we believe that,” it flags the fact that this is not within our area of expertise, but we think we are in compliance.
Moreover, even if one assumes that a corporation issuing a registration statement is (by operation of law) an “expert” with regard to all matters stated or opined about, I would still not agree with the Court‘s disposition. The Court says the following:
“Section 11‘s omissions clause, as applied to statements of both opinion and fact, necessarily brings the reasonable person into the analysis, and asks what she would naturally understand a statement to convey beyond its literal meaning. And for expressions of opinion, that means considering the foundation she would expect an issuer to have before making the statement.” Ante, at 17 (emphasis added).
The first sentence is true enough—but “what she [the reasonable (female) person, and even he, the reasonable (male) person] would naturally understand a statement [of opinion] to convey” is not that the statement has the foun-
The common law understood this distinction. An action for fraudulent misrepresentation based on an opinion of an expert* was only allowed when the expression of the opinion conveyed a fact—the “fact” that summarized the expert‘s knowledge. Prosser & Keeton §109, at 761. And a fact was actionable only if the speaker knew it was false, if he knew he did not know it, or if he knew the listener would understand the statement to have a basis that the speaker knew was not true. Restatement of Torts §526, at 63-64. Ah!, the majority might say, so a speaker is liable for knowing he lacks the listener‘s reasonable basis! If the speaker knows—is actually aware—that the listener will understand an expression of opinion to have a specific basis that it does not have, then of course he satisfies this element of the tort.
But more often, when any basis is implied at all, both sides will understand that thе speaker implied a “reasonable basis,” but honestly disagree on what that means. And the common law supplied a solution for this: A speaker was liable for ambiguous statements—misunderstandings—as
This aligns with common sense. When a client receives advice from his lawyer, it is surely implicit in that advice that the lawyer has conducted a reasonable investigation—reasonable, that is, in the lawyer‘s estimation. The client is relying on the expert lawyer‘s judgment for the amount of investigation necessary, no less than for the legal conclusion. To be sure, if the lawyer conducts an investigation that he does not believe is adequate, he would be liable for misrepresentation. And if he conducts an investigation that he believes is adequate but is objectively unreasonable (and reaches an incorrect result), he may be liable for malpractice. But on the latter premise he is not liable for misrepresentation; all that was implicit in his advice was that he had conducted an investigation he deemed adequate. To rely on an expert‘s opinion is to rely on the expert‘s evaluation of how much time to spend on the question at hand.
The objective test proposed by the Court—inconsistent with the common law and common intuitions about statements of opinion—invites roundabout attacks upon ex-
Nor is this objective test justified by
Not to worry, says the Court. Sellers of securities need “only divulge an opinion‘s basis, or else make clear the real tentativeness of [their] belief[s].” Ante, at 18. One wonders what the function of “in my estimation” is, then, except as divulging such hesitation. Or what would be sufficient for the Court. “In my highly tentative estimation?” “In my estimation that, consistent with Omnicare, should be understood as an opinion only?” Reasonable speakers do not speak this way, and reasonable listeners do not receive opinions this way. When an expert expresses an opinion instead of stating a fact, it implies (1) that he genuinely believes the opinion, (2) that he believes his basis for the opinion is sufficient, and (most important) (3) that he is not certain of his result. Nothing more. This approach would have given lower courts and investors far more guidance and would largely have avoided the Funds’ attack upon Omnicare‘s opinions as though Omnicare held those opinions out to be facts.
I therefore concur only in part and in the judgment.
The question whether and under what circumstances an omission may make a statement of opinion misleading is оne that we should have left to the lower courts to decide on remand. As the majority acknowledges, that question was never passed on below. See ante, at 19. With good reason: Apart from a few conclusory allegations in their complaint and some pro forma references to “misleading statements and omissions” in their briefs, respondents did not elaborate on the omissions theory of liability before either the District Court or the Court of Appeals. They certainly did not articulate the theory the majority now adopts until they filed their merits brief before this Court. And it was not until oral argument that they identified a factual allegation in their complaint that might serve to state a claim under that theory. See ante, at 19–20. This delay is unsurprising given that, although various Courts of Appeals have discussed the theory, they have been
We should exercise the same caution. This Court rarely prides itself on being a pioneer of novel legal claims, as “[o]urs is a court of final review and not first view.” Zivotofsky v. Clinton, 566 U. S. ___, ___ (2012) (slip op., at 12) (internal quotation marks omitted). Thus, as a general rule, “we do not decide in the first instance issues not decided below.” Ibid. (internal quotation marks omitted). This includes fashioning innovative theories of liability as much as it includes applying thosе theories to the circumstances of the case.
The Court has previously relied on a lower court‘s failure to address an issue below as a reason for declining to address it here, even when the question was fairly presented in the petition and fully vetted by other lower courts. See, e.g., CSX Transp., Inc. v. Alabama Dept. of Revenue, 562 U. S. 277, 284, n. 5 (2011); see also id., at 303, n. 3 (THOMAS, J., dissenting). Surely the feature that distinguishes this case—a novel legal theory that is not fairly included in the question presented—counsels more strongly in favor of avoidance.
As JUSTICE SCALIA‘s concurrence reveals, the scope of this theory of liability is far from certain. And the highly fact-intensive nature of the omissions theory provides an additional reason not to address it at this time. The majority acknowledges that the facts a reasonable investor may infer from a statement of opinion depend on the context. And yet it opines about certain facts an investor may infer from an issuer‘s legal compliance opinion: that such an opinion is based on legal advice, for example, or that it is not contradicted by the Federal Government.