The Sixth Circuit split with the Second and Ninth Circuits today on what a plaintiff must plead under section 11 of the Securities Act of 1933 in cases that involve opinions, views, and other "soft" info.
The panel looked at a claim that Omnicare violated Section 11 by publicly stating its judgment that its drug-care services for people who live in long-term care complied with the law when in fact the services didn't comply. Omnicare argued on appeal that the district court rightly kicked the case on the ground that the complaint failed to allege that Omnicare knew it hadn't met its legal duties. But the panel held that plaintiffs met their pleading burden simply by calling the opinion false. Section 11 does not require proof of scienter (intent to defraud), it pointed out, although it does allow a good faith defense (which didn't matter because the court needed to assess only whether plaintiffs had stated a valid claim).
The threesome also noted their own opinion that colleagues in New York and San Francisco had gotten the law on the point wrong. Indiana State District Council of Laborers and Hod Carriers Pension and Welfare Fund v Omnicare, Inc., No. 12-5287 (6th Cir. May 23, 2013) (declining to follow Fait v. Regions Financial Corp., 655 F.3d 105 (2d Cir. 2011), and Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1162 (9th Cir. 2009)).