Plaintiffs Prevail in District Court After Supreme Court Ruling in Omnicare Securities Case
On August 24, 2016, Judge William O. Bertelsman of the U.S. District Court for the Eastern District of Kentucky denied the defendants’ motion to dismiss in Indiana State District Council of Laborers and HOD Carriers Pension and Welfare Fund v. Omnicare, Inc. The securities fraud class action was brought against Omnicare and certain of its officers and directors for violations of the Securities Act. Omnicare provides pharmaceutical care for elderly people primarily in the United States and Canada. The District Court ruling yesterday is especially notable for plaintiffs after the remand from the Supreme Court last year.
Previously, Robbins Geller’s Appellate Practice Group obtained an important victory in the United States Supreme Court in March 2015. The Supreme Court ruled that investors asserting a claim under Section 11 of the Securities Act of 1933 with respect to a misleading statement of opinion do not, as defendant Omnicare had contended, have to prove that the statement was subjectively disbelieved when made. Rather, the Court held that a statement of opinion may be actionable either because it was not believed, or because it lacked a reasonable basis in fact. This decision is significant in that it resolved a conflict among the federal Circuit Courts, and expressly overruled the Second Circuit’s widely followed, more stringent pleading standard for Section 11 claims involving statements of opinion.
The District Court ruling follows 10 years of litigation, which began when the initial complaint was filed on February 2, 2006. Robbins Geller attorneys litigating the case are partners Henry Rosen and Jessica Shinnefield.
Indiana State District Council of Laborers and HOD Carriers Pension and Welfare Fund v. Omnicare, Inc., Case No. 2:06-cv-00026-WOB (E.D. Ky. Aug. 24, 2016).