The Supreme Court’s decision yesterday in Omnicare Inc. v. The Laborers District Council Construction Industry Pension Fund, No. 13-435 (U.S. March 23, 2015) articulated the standard of liability for statements of opinion. At its core, the decision endorses the uncontroversial notion that public companies must have a reasonable basis supporting any opinions they disclose. What constitutes a reasonable basis will depend on what a reasonable investor would expect, unless the opinion is accompanied by disclosure of the actual basis for the expressed opinion.

Strictly speaking, the Omnicare ruling addresses the standard of liability for statements of opinion published in registration statements that are filed in connection with a public offering of securities. The ruling, however, might have some spillover effect that shapes whether and how public companies and those that speak on their behalf express opinions in other types of investor communications. To minimize the risk of liability, Omnicare hints of a new best practice: either don’t opine (which may not be practical in many cases), or accompany any volunteered opinion with the actual reasons supporting it, and appropriate context, including “hedges, disclaimers, or qualifications.” More disclosure, not less, may be the order of the day.