Ninth Circuit Applies Omnicare to Section 10(b) and Rule 10b-5 Claims

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The Ninth Circuit follows the Second and Tenth Circuits in extending Omnicare’s requirements for pleading the falsity of opinion statements to claims under Section 10(b) and Rule 10b-5.

In recent years, courts have grappled with the question of whether statements of opinion are actionable as false or misleading statements under federal securities laws. In its highly anticipated 2015 opinion, Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, the U.S. Supreme Court set forth the standard for pleading falsity under Section 11 of the Securities Act of 1933 for statements of opinion. Since then, the Ninth Circuit had not definitively pronounced whether these standards also apply to claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. In its May 5, 2017 decision in City of Dearborn Heights Act 345 Police & Fire Retirement System v. Align Technology, Inc., the Ninth Circuit joined the Second and Tenth Circuits in applying the Omnicare standard to Section 10(b) and Rule 10b-5 claims.

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