United States Supreme Court

In this securities action, petitioner Omnicare, a pharmacy services company, filed a registration statement in connection with a public offering of common stock, and in addition to the required disclosures, the registration statement contained two statements expressing the company's opinion that it was in compliance with federal and state laws. After the Federal Government field suit against Omnicare for allegedly receiving kickbacks from pharmaceutical manufacturers, respondent pension funds that purchased stock sued Omnicare under section 11 of the Securities Act, claiming that Omnicare's legal-compliance statements constituted "untrue statements of material fact" and that Omnicare "omitted to state the facts necessary" to make those statements not misleading. The district court granted Omnicare's motion to dismiss and the Sixth Circuit reversed, holding that no showing of subjective disbelief was required, and that the allegations that Omnicare's legal-compliance opinions were objectively false sufficed to support respondents' claim. The judgment of the Sixth Circuit is vacated and the case is remanded, where: 1) because a statement of opinion admits the possibility of error, such a statement remains true, and thus is not an "untrue statement of fact," even if the opinion turns out to have been wrong; 2) a statement of opinion qualifies as an "untrue statement of fact" if the opinion expressed was not sincerely held, but Omnicare's sincerity is not contested here; 3) if a registration statement omits material facts about the issuer's inquiry into, or knowledge concerning, a state of opinion, and those facts conflict with what a reasonable investor would take from the statement itself, then the section 11 omissions create liability.

Appellate Information

• Decided 03/24/2015
• Published 03/24/2015

Judges

• Kagan

Court

• United States Supreme Court

Counsel