The United States Court of Appeals for the Sixth Circuit recently issued an important decision regarding the requirements for stating a claim under Section 11 of the Securities Act of 1933 based on an allegedly misleading opinion in a registration statement. In Indiana State District Council of Laborers & HOD Carriers Pension & Welfare Fund v. Omnicare, Inc., 2013 U.S. App. LEXIS 10385 (6th Cir. May 23, 2013), the Sixth Circuit ruled that, when a plaintiff asserts a Section 11 claim premised on an allegedly false statement of opinion or belief, the plaintiff must plead (and eventually prove) that the statement was objectively false, but does not have to plead or prove that the defendant knew the statement was untrue at the time it was made. This ruling conflicts with decisions by the Second and Ninth Circuits, which have held that an opinion can give rise to a claim under Section 11 only if the complaint alleges that the statement was both objectively false and disbelieved by the defendant at the time it was made. See Fait v. Regions Fin. Corp., 655 F.3d 105, 110 (2d Cir. 2011); Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1162 (9th Cir. 2009).
View full memo, "The Sixth Circuit Establishes a Lenient Standard for Pleading a Section 11 Claim Based on an Allegedly Misleading Opinion in a Registration Statement"