Supreme Court May Reject Argument that Opinion Statements Are Actionable Simply Because False

During oral arguments in Omnicare v. Laborers District Council last week, the Supreme Court appeared to signal a rejection of the Sixth Circuit Court of Appeals’ position that a sincerely held statement of opinion or belief may be actionable under the Securities Act of 1933 simply because it was incorrect. The case concerns statements such as Omnicare Inc.’s disclosure that “we believe that our contractual arrangements with pharmaceutical manufacturers are legally and economically valid arrangements that bring value to the healthcare system and patients that we serve.” The plaintiffs contend the disclosure was inaccurate because it was made after the company had been named in whistleblower lawsuits alleging that Omnicare had received kickbacks from drug companies and had submitted false claims to the government.

Proskauer’s co-head of Securities Litigation Jonathan E. Richman spoke about the oral argument with:

• Inside Counsel,Truth May Be a Subjective Matter in Supreme Court Case;
• Bloomberg BNA,Justices May Take Middle Ground Over § 11 Liability for Opinion Statements; and
• Law360, Justices Face Muddy Waters With Omnicare Middle Ground.

We will continue to provide updates on this case.