Omnicare, Inc. v. Laborers Dist. Council Constr. Industry Pension Fund , 135 S. Ct. 1318 ( 2015 )

(Slip Opinion) OCTOBER TERM, 2014 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
OMNICARE, INC., ET AL. v. LABORERS DISTRICT
COUNCIL CONSTRUCTION INDUSTRY PENSION
FUND ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SIXTH CIRCUIT
No. 13–435. Argued November 3, 2014—Decided March 24, 2015
The Securities Act of 1933 requires that a company wishing to issue
securities must first file a registration statement containing specified
information about the issuing company and the securities offered.
See 15 U. S. C. §§77g, 77aa. The registration statement may also in-
clude other representations of fact or opinion. To protect investors
and promote compliance with these disclosure requirements, §11 of
the Act creates two ways to hold issuers liable for a registration
statement’s contents: A purchaser of securities may sue an issuer if
the registration statement either “contain[s] an untrue statement of a
material fact” or “omit[s] to state a material fact . . . necessary to
make the statements therein not misleading.” §77k(a). In either
case, the buyer need not prove that the issuer acted with any intent
to deceive or defraud. Herman & MacLean v. Huddleston, 459 U. S.
375, 381–382.
Petitioner Omnicare, a pharmacy services company, filed a regis-
tration statement in connection with a public offering of common
stock. In addition to the required disclosures, the registration state-
ment contained two statements expressing the company’s opinion
that it was in compliance with federal and state laws. After the Fed-
eral Government filed suit against Omnicare for allegedly receiving
kickbacks from pharmaceutical manufacturers, respondents, pension
funds that purchased Omnicare stock (hereinafter Funds), sued Om-
nicare under §11. They claimed that Omnicare’s legal-compliance
statements constituted “untrue statement[s] of . . . material fact” and
that Omnicare “omitted to state [material] facts necessary” to make
those statements not misleading.
2 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Syllabus
The District Court granted Omnicare’s motion to dismiss. Because
the Funds had not alleged that Omnicare’s officers knew they were
violating the law, the court found that the Funds had failed to state a
§11 claim. The Sixth Circuit reversed. Acknowledging that the
statements at issue expressed opinions, the court held that no show-
ing of subjective disbelief was required. In the court’s view, the
Funds’ allegations that Omnicare’s legal-compliance opinions were
objectively false sufficed to support their claim.
Held:
1. A statement of opinion does not constitute an “untrue statement
of . . . fact” simply because the stated opinion ultimately proves incor-
rect. The Sixth Circuit’s contrary holding wrongly conflates facts and
opinions. A statement of fact expresses certainty about a thing,
whereas a statement of opinion conveys only an uncertain view as to
that thing. Section 11 incorporates that distinction in its first clause
by exposing issuers to liability only for “untrue statement[s] of . . .
fact.” §77k(a) (emphasis added). Because a statement of opinion ad-
mits the possibility of error, such a statement remains true—and
thus is not an “untrue statement of . . . fact”—even if the opinion
turns out to have been wrong.
But opinion statements are not wholly immune from liability under
§11’s first clause. Every such statement explicitly affirms one fact:
that the speaker actually holds the stated belief. A statement of
opinion thus qualifies as an “untrue statement of . . . fact” if that fact
is untrue—i.e., if the opinion expressed was not sincerely held. In
addition, opinion statements can give rise to false-statement liability
under §11 if they contain embedded statements of untrue facts.
Here, however, Omnicare’s sincerity is not contested and the state-
ments at issue are pure opinion statements. The Funds thus cannot
establish liability under §11’s first clause. Pp. 6–10.
2. If a registration statement omits material facts about the issu-
er’s inquiry into, or knowledge concerning, a statement of opinion,
and if those facts conflict with what a reasonable investor, reading
the statement fairly and in context, would take from the statement
itself, then §11’s omissions clause creates liability. Pp. 10–20.
(a) For purposes of §11’s omissions clause, whether a statement
is “misleading” is an objective inquiry that depends on a reasonable
investor’s perspective. Cf. TSC Industries, Inc. v. Northway, Inc., 426
U. S. 438, 445. Omnicare goes too far by claiming that no reasonable
person, in any context, can understand a statement of opinion to con-
vey anything more than the speaker’s own mindset. A reasonable in-
vestor may, depending on the circumstances, understand an opinion
statement to convey facts about the speaker’s basis for holding that
view. Specifically, an issuer’s statement of opinion may fairly imply
Cite as: 575 U. S. ____ (2015) 3
Syllabus
facts about the inquiry the issuer conducted or the knowledge it had.
And if the real facts are otherwise, but not provided, the opinion
statement will mislead by omission.
An opinion statement, however, is not misleading simply because
the issuer knows, but fails to disclose, some fact cutting the other
way. A reasonable investor does not expect that every fact known to
an issuer supports its opinion statement. Moreover, whether an
omission makes an expression of opinion misleading always depends
on context. Reasonable investors understand opinion statements in
light of the surrounding text, and §11 creates liability only for the
omission of material facts that cannot be squared with a fair reading
of the registration statement as a whole. Omnicare’s arguments to
the contrary are unavailing. Pp. 10–19.
(b) Because neither court below considered the Funds’ omissions
theory under the right standard, this case is remanded for a determi-
nation of whether the Funds have stated a viable omissions claim.
On remand, the court must review the Funds’ complaint to determine
whether it adequately alleges that Omnicare omitted from the regis-
tration statement some specific fact that would have been material to
a reasonable investor. If so, the court must decide whether the al-
leged omission rendered Omnicare’s opinion statements misleading
in context. Pp. 19–20.
719 F. 3d 498, vacated and remanded.
KAGAN, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, GINSBURG, BREYER, ALITO, and SOTOMAYOR, JJ.,
joined. SCALIA, J., filed an opinion concurring in part and concurring in
the judgment. THOMAS, J., filed an opinion concurring in the judgment.
Cite as: 575 U. S. ____ (2015) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–435
_________________
OMNICARE, INC., ET AL., PETITIONERS v. LABORERS
DISTRICT COUNCIL CONSTRUCTION INDUSTRY
PENSION FUND ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT
[March 24, 2015]
JUSTICE KAGAN delivered the opinion of the Court.
Before a company may sell securities in interstate com-
merce, it must file a registration statement with the Secu-
rities and Exchange Commission (SEC). If that document
either “contain[s] an untrue statement of a material fact”
or “omit[s] to state a material fact . . . necessary to make
the statements therein not misleading,” a purchaser of the
stock may sue for damages. 15 U. S. C. §77k(a). This case
requires us to decide how each of those phrases applies to
statements of opinion.
I
The Securities Act of 1933, 48 Stat. 74, 15 U. S. C. §77a
et seq., protects investors by ensuring that companies
issuing securities (known as “issuers”) make a “full and
fair disclosure of information” relevant to a public offering.
Pinter v. Dahl, 486 U. S. 622, 646 (1988). The linchpin of
the Act is its registration requirement. With limited
exceptions not relevant here, an issuer may offer securi-
ties to the public only after filing a registration statement.
See §§77d, 77e. That statement must contain specified
2 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
information about both the company itself and the security
for sale. See §§77g, 77aa. Beyond those required disclo-
sures, the issuer may include additional representations of
either fact or opinion.
Section 11 of the Act promotes compliance with these
disclosure provisions by giving purchasers a right of action
against an issuer or designated individuals (directors,
partners, underwriters, and so forth) for material mis-
statements or omissions in registration statements. As
relevant here, that section provides:
“In case any part of the registration statement, when
such part became effective, contained an untrue
statement of a material fact or omitted to state a ma-
terial fact required to be stated therein or necessary to
make the statements therein not misleading, any per-
son acquiring such security . . . [may] sue.” §77k(a).
Section 11 thus creates two ways to hold issuers liable for
the contents of a registration statement—one focusing on
what the statement says and the other on what it leaves
out. Either way, the buyer need not prove (as he must to
establish certain other securities offenses) that the de-
fendant acted with any intent to deceive or defraud.
Herman & MacLean v. Huddleston, 459 U. S. 375, 381–
382 (1983).
This case arises out of a registration statement that
petitioner Omnicare filed in connection with a public
offering of common stock. Omnicare is the nation’s largest
provider of pharmacy services for residents of nursing
homes. Its registration statement contained (along with
all mandated disclosures) analysis of the effects of various
federal and state laws on its business model, including its
acceptance of rebates from pharmaceutical manufacturers.
See, e.g., App. 88–107, 132–140, 154–166. Of significance
here, two sentences in the registration statement ex-
pressed Omnicare’s view of its compliance with legal
Cite as: 575 U. S. ____ (2015) 3
Opinion of the Court
requirements:
 “We believe our contract arrangements with other
healthcare providers, our pharmaceutical suppli-
ers and our pharmacy practices are in compliance
with applicable federal and state laws.” Id., at 95.
 “We believe that our contracts with pharmaceutical
manufacturers are legally and economically valid
arrangements that bring value to the healthcare
system and the patients that we serve.” Id., at 137.
Accompanying those legal opinions were some caveats. On
the same page as the first statement above, Omnicare
mentioned several state-initiated “enforcement actions
against pharmaceutical manufacturers” for offering pay-
ments to pharmacies that dispensed their products; it then
cautioned that the laws relating to that practice might “be
interpreted in the future in a manner inconsistent with
our interpretation and application.” Id., at 96. And adja-
cent to the second statement, Omnicare noted that the
Federal Government had expressed “significant concerns”
about some manufacturers’ rebates to pharmacies and
warned that business might suffer “if these price conces-
sions were no longer provided.” Id., at 136–137.
Respondents here, pension funds that purchased Om-
nicare stock in the public offering (hereinafter Funds),
brought suit alleging that the company’s two opinion
statements about legal compliance give rise to liability
under §11. Citing lawsuits that the Federal Government
later pressed against Omnicare, the Funds’ complaint
maintained that the company’s receipt of payments from
drug manufacturers violated anti-kickback laws. See id.,
at 181–186, 203–226. Accordingly, the complaint asserted,
Omnicare made “materially false” representations about
legal compliance. Id., at 274. And so too, the complaint
continued, the company “omitted to state [material] facts
necessary” to make its representations not misleading.
4 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
Id., at 273. The Funds claimed that none of Omnicare’s
officers and directors “possessed reasonable grounds” for
thinking that the opinions offered were truthful and com-
plete. Id., at 274. Indeed, the complaint noted that one of
Omnicare’s attorneys had warned that a particular con-
tract “carrie[d] a heightened risk” of liability under anti-
kickback laws. Id., at 225 (emphasis deleted). At the
same time, the Funds made clear that in light of §11’s
strict liability standard, they chose to “exclude and dis-
claim any allegation that could be construed as alleging
fraud or intentional or reckless misconduct.” Id., at 273.
The District Court granted Omnicare’s motion to dis-
miss. See Civ. No. 2006–26 (ED Ky., Feb. 13, 2012), App.
to Pet. for Cert. 28a, 38a–40a, 2012 WL 462551, *4–*5. In
the court’s view, “statements regarding a company’s belief
as to its legal compliance are considered ‘soft’ information”
and are actionable only if those who made them “knew
[they] were untrue at the time.” App. to Pet. for Cert. 38a.
The court concluded that the Funds’ complaint failed to
meet that standard because it nowhere claimed that “the
company’s officers knew they were violating the law.” Id.,at 39a. The Court of Appeals for the Sixth Circuit re-
versed. See 719 F. 3d 498 (2013). It acknowledged that
the two statements highlighted in the Funds’ complaint
expressed Omnicare’s “opinion” of legal compliance, rather
than “hard facts.” Id., at 504 (quoting In re Sofamor
Danek Group Inc., 123 F. 3d 394, 401–402 (CA6 1997)).
But even so, the court held, the Funds had to allege only
that the stated belief was “objectively false”; they did not
need to contend that anyone at Omnicare “disbelieved [the
opinion] at the time it was expressed.” 719 F. 3d, at 506
(quoting Fait v. Regions Financial Corp., 655 F. 3d 105,
110 (CA2 2011)).
We granted certiorari, 571 U. S. ___ (2014), to consider
how §11 pertains to statements of opinion. We do so in
two steps, corresponding to the two parts of §11 and the
Cite as: 575 U. S. ____ (2015) 5
Opinion of the Court
two theories in the Funds’ complaint. We initially address
the Funds’ claim that Omnicare made “untrue state-
ment[s] of . . . material fact” in offering its views on legal
compliance. §77k(a); see App. 273–274. We then take up
the Funds’ argument that Omnicare “omitted to state a
material fact . . . necessary to make the statements [in its
registration filing] not misleading.” §77k(a); see App.
273–274. Unlike both courts below, we see those allega-
tions as presenting different issues.1 In resolving the first,
we discuss when an opinion itself constitutes a factual
misstatement. In analyzing the second, we address when
an opinion may be rendered misleading by the omission of
discrete factual representations. Because we find that the
Court of Appeals applied the wrong standard, we vacate
its decision.
——————
1 In his concurrence, JUSTICE THOMAS contends that the lower courts’
erroneous conflation of these two questions should limit the scope of our
review: We should say nothing about omissions, he maintains, because
that issue was not pressed or passed on below. We disagree. Although
the Funds could have written a clearer complaint, they raised a discrete
omissions claim. See, e.g., App. 191 (“[T]he Company’s 2005 Registra-
tion Statement . . . omitted material information that was . . . necessary
to make the Registration Statement not misleading”); id., at 273 (“The
Registration Statement . . . omitted to state facts necessary to make the
statements made not misleading, and failed to adequately disclose
material facts as described above”). The lower courts chose not to
address that claim separately, but understood that the complaint
alleged not only misstatements but also omissions. See App. to Pet. for
Cert. 38a (describing the Funds’ claims as relating to “misstate-
ments/omissions” and dismissing the lot as “not actionable”); 719 F. 3d,
at 501 (giving a single rationale for reversing the District Court’s
dismissal of the Funds’ claims “for material misstatements and omis-
sions”). And the omissions issue was the crux of the parties’ dispute
before this Court. The question was fully briefed by both parties (plus
the Solicitor General), and omissions played a starring role at oral
argument. Neither in its briefs nor at argument did Omnicare ever
object that the Funds’ omissions theory had been forfeited or was not
properly before this Court. We therefore see no reason to ignore the
issue.
6 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
II
The Sixth Circuit held, and the Funds now urge, that a
statement of opinion that is ultimately found incorrect—
even if believed at the time made—may count as an “un-
true statement of a material fact.” 15 U. S. C §77k(a); see
719 F. 3d, at 505; Brief for Respondents 20–26. As the
Funds put the point, a statement of belief may make an
implicit assertion about the belief ’s “subject matter”: To
say “we believe X is true” is often to indicate that “X is in
fact true.” Id., at 23; see Tr. of Oral Arg. 36. In just that
way, the Funds conclude, an issuer’s statement that “we
believe we are following the law” conveys that “we in fact
are following the law”—which is “materially false,” no
matter what the issuer thinks, if instead it is violating an
anti-kickback statute. Brief for Respondents 1.
But that argument wrongly conflates facts and opinions.
A fact is “a thing done or existing” or “[a]n actual happen-
ing.” Webster’s New International Dictionary 782 (1927).
An opinion is “a belief[,] a view,” or a “sentiment which the
mind forms of persons or things.” Id., at 1509. Most
important, a statement of fact (“the coffee is hot”) expresses
certainty about a thing, whereas a statement of opinion
(“I think the coffee is hot”) does not. See ibid. (“An opin-
ion, in ordinary usage . . . does not imply . . . definiteness
. . . or certainty”); 7 Oxford English Dictionary 151 (1933)
(an opinion “rests[s] on grounds insufficient for complete
demonstration”). Indeed, that difference between the two
is so ingrained in our everyday ways of speaking and
thinking as to make resort to old dictionaries seem a mite
silly. And Congress effectively incorporated just that
distinction in §11’s first part by exposing issuers to liabil-
ity not for “untrue statement[s]” full stop (which would
have included ones of opinion), but only for “untrue state-
ment[s] of . . . fact.” §77k(a) (emphasis added).
Consider that statutory phrase’s application to two
hypothetical statements, couched in ways the Funds claim
Cite as: 575 U. S. ____ (2015) 7
Opinion of the Court
are equivalent. A company’s CEO states: “The TVs we
manufacture have the highest resolution available on the
market.” Or, alternatively, the CEO transforms that
factual statement into one of opinion: “I believe” (or “I
think”) “the TVs we manufacture have the highest resolu-
tion available on the market.” The first version would be
an untrue statement of fact if a competitor had introduced
a higher resolution TV a month before—even assuming
the CEO had not yet learned of the new product. The
CEO’s assertion, after all, is not mere puffery, but a de-
terminate, verifiable statement about her company’s TVs;
and the CEO, however innocently, got the facts wrong.
But in the same set of circumstances, the second version
would remain true. Just as she said, the CEO really did
believe, when she made the statement, that her company’s
TVs had the sharpest picture around. And although a
plaintiff could later prove that opinion erroneous, the
words “I believe” themselves admitted that possibility,
thus precluding liability for an untrue statement of fact.
That remains the case if the CEO’s opinion, as here, con-
cerned legal compliance. If, for example, she said, “I
believe our marketing practices are lawful,” and actually
did think that, she could not be liable for a false statement
of fact—even if she afterward discovered a longtime viola-
tion of law. Once again, the statement would have been
true, because all she expressed was a view, not a certainty,
about legal compliance.
That still leaves some room for §11’s false-statement
provision to apply to expressions of opinion. As even
Omnicare acknowledges, every such statement explicitly
affirms one fact: that the speaker actually holds the stated
belief. See Brief for Petitioners 15–16; W. Keeton, D.
Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the
Law of Torts §109, p. 755 (5th ed. 1984) (Prosser and
Keeton) (“[A]n expression of opinion is itself always a
statement of . . . the fact of the belief, the existing state of
8 OMNICARE, INC. v. LABORERS DIST. COUNCIL
CONSTR. INDUSTRY PENSION FUND
Opinion of the Court
mind, of the one who asserts it”). For that reason, the
CEO’s statement about product quality (“I believe our TVs
have the highest resolution available on the market”)
would be an untrue statement of fact—namely, the fact of
her own belief—if she knew that her company’s TVs only
placed second. And so too the statement about legal com-
pliance (“I believe our marketing practices are lawful”)
would falsely describe her own state of mind if she thought
her company was breaking the law. In such cases, §11’s
first part would subject the issuer to liability (assuming
the misrepresentation were material).2
In addition, some sentences that begin with opinion
words like “I believe” contain embedded statements of
fact—as, once again, Omnicare recognizes. See Reply
Brief 6. Suppose the CEO in our running hypothetical
said: “I believe our TVs have the highest resolution avail-
able because we use a patented technology to which our
competitors do not have access.” That statement may be
read to affirm not only the speaker’s state of mind, as
——————
2 Our decision in Virginia Bankshares, Inc. v. Sandberg, 501 U. S.
1083 (1991), qualifies this statement in one respect. There, the Court
considered when corporate directors’ statements of opinion in a proxy
solicitation give rise to liability under §14(a) of the Securities Exchange
Act, 15 U. S. C. §78n(a), which bars conduct similar to that described in
§11. In discussing that issue, the Court raised the hypothetical possi-
bility that a director could think he was lying while actually (i.e.,
accidentally) telling the truth about the matter addressed in his opin-
ion. See Virginia Bankshares, 501 U. S., at 1095–1096. That rare set
of facts, the Court decided, would not lead to liability under §14(a). See
ibid. The Court reasoned that such an inadvertently correct assess-
ment is unlikely to cause anyone harm and that imposing liability
merely for the “impurities” of a director’s “unclean heart” might pro-
voke vexatious litigation. Id., at 1096 (quoting Stedman v. Storer, 308
F. Supp. 881, 887 (SDNY 1969)). We think the same is true (to the
extent this scenario ever occurs in real life) under §11. So if our CEO
did not believe that her company’s TVs had the highest resolution on
the market, but (surprise!) they really did, §11 would not impose
liability for her statement.
Cite as: 575 U. S. ____ (2015) 9
Opinion of the Court
described above, but also an underlying fact: that the
company uses a patented technology. See Virginia Bank-
shares, Inc. v. Sandberg, 501 U. S. 1083, 1109 (1991)
(SCALIA, J., concurring in part and concurring in judg-
ment) (showing that a statement can sometimes be “most
fairly read as affirming separately both the fact of the
[speaker’s] opinion and the accuracy of the facts” given to
support or explain it (emphasis deleted)). Accordingly,
liability under §11’s false-statement provision would
follow (once again, assuming materiality) not only if the
speaker did not hold the belief she professed but also if the
supporting fact she supplied were untrue.
But the Funds cannot avail themselves of either of those
ways of demonstrating liability. The two sentences to
which the Funds object are pure statements of opinion: To
simplify their content only a bit, Omnicare said in each
that “we believe we are obeying the law.” And the Funds
do not contest that Omnicare’s opinion was honestly held.
Recall that their complaint explicitly “exclude[s] and
disclaim[s]” any allegation sounding in fraud or deception.
App. 273. What the Funds instead claim is that Omni-
care’s belief turned out to be wrong—that whatever the
company thought, it was in fact violating anti-kickback
laws. But that allegation alone will not give rise to liabil-
ity under §11’s first clause because, as we have shown, a
sincere statement of pure opinion is not an “untrue state-
ment of material fact,” regardless whether an investor can
ultimately prove the belief wrong. That clause, limited as
it is to factual statements, does not allow investors to
second-guess inherently subjective and uncertain assess-
ments. In other words, the provision is not, as the Court
of Appeals and the Funds would have it, an invitation to
Monday morning quarterback an issuer’s opinions.
10 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
III
A
That conclusion, however, does not end this case be-
cause the Funds also rely on §11’s omissions provision,
alleging that Omnicare “omitted to state facts necessary”
to make its opinion on legal compliance “not misleading.”
App. 273; see §77k(a).3 As all parties accept, whether a
statement is “misleading” depends on the perspective of a
reasonable investor: The inquiry (like the one into materi-
ality) is objective. Cf. TSC Industries, Inc. v. Northway,
Inc., 426 U. S. 438, 445 (1976) (noting that the securities
laws care only about the “significance of an omitted or
misrepresented fact to a reasonable investor”). We there-
fore must consider when, if ever, the omission of a fact can
make a statement of opinion like Omnicare’s, even if
literally accurate, misleading to an ordinary investor.
Omnicare claims that is just not possible. On its view,
no reasonable person, in any context, can understand a
pure statement of opinion to convey anything more than
the speaker’s own mindset. See Reply Brief 5–6. As long
as an opinion is sincerely held, Omnicare argues, it cannot
mislead as to any matter, regardless what related facts
the speaker has omitted. Such statements of belief (con-
cludes Omnicare) are thus immune from liability under
§11’s second part, just as they are under its first.4
——————
3 Section 11’s omissions clause also applies when an issuer fails to
make mandated disclosures—those “required to be stated”—in a
registration statement. §77k(a). But the Funds do not object to Om-
nicare’s filing on that score.
4 In a different argument that arrives at the same conclusion, Om-
nicare maintains that §11, by its terms, bars only those omissions that
make statements of fact—not opinion—misleading. See Reply Brief 3–
5. The language of the omissions clause, however, is not so limited. It
asks whether an omitted fact is necessary to make “statements” in “any
part of the registration statement” not misleading; unlike in §11’s first
clause, here the word “statements” is unmodified, thus including both
fact and opinion. In any event, Omnicare’s alternative interpretation
Cite as: 575 U. S. ____ (2015) 11
Opinion of the Court
That claim has more than a kernel of truth. A reason-
able person understands, and takes into account, the differ-
ence we have discussed above between a statement of fact
and one of opinion. See supra, at 6–7. She recognizes the
import of words like “I think” or “I believe,” and grasps
that they convey some lack of certainty as to the state-
ment’s content. See, e.g., Restatement (Second) of Con-
tracts §168, Comment a, p. 456 (1979) (noting that a
statement of opinion “implies that [the speaker] . . . is not
certain enough of what he says” to do without the qualify-
ing language). And that may be especially so when the
phrases appear in a registration statement, which the
reasonable investor expects has been carefully word-
smithed to comply with the law. When reading such a
document, the investor thus distinguishes between the
sentences “we believe X is true” and “X is true.” And
because she does so, the omission of a fact that merely
rebuts the latter statement fails to render the former
misleading. In other words, a statement of opinion is not
misleading just because external facts show the opinion to
be incorrect. Reasonable investors do not understand such
statements as guarantees, and §11’s omissions clause
therefore does not treat them that way.
But Omnicare takes its point too far, because a reason-
able investor may, depending on the circumstances, under-
stand an opinion statement to convey facts about how the
speaker has formed the opinion—or, otherwise put, about
the speaker’s basis for holding that view. And if the real
facts are otherwise, but not provided, the opinion state-
ment will mislead its audience. Consider an unadorned
——————
succeeds merely in rephrasing the critical issue. Omnicare recognizes
that every opinion statement is also a factual statement about the
speaker’s own belief. See supra, at 7–8. On Omnicare’s view, the
question thus becomes when, if ever, an omission can make a statement
of that fact misleading to an ordinary investor. The following analysis
applies just as well to that reformulation.
12 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
statement of opinion about legal compliance: “We believe
our conduct is lawful.” If the issuer makes that statement
without having consulted a lawyer, it could be misleadingly
incomplete. In the context of the securities market, an
investor, though recognizing that legal opinions can prove
wrong in the end, still likely expects such an assertion to
rest on some meaningful legal inquiry—rather than, say,
on mere intuition, however sincere.5 Similarly, if the
issuer made the statement in the face of its lawyers’ con-
trary advice, or with knowledge that the Federal Govern-
ment was taking the opposite view, the investor again has
cause to complain: He expects not just that the issuer
believes the opinion (however irrationally), but that it
fairly aligns with the information in the issuer’s posses-
sion at the time.6 Thus, if a registration statement omits
material facts about the issuer’s inquiry into or knowledge
concerning a statement of opinion, and if those facts
conflict with what a reasonable investor would take from
the statement itself, then §11’s omissions clause creates
liability.7
——————
5 In some circumstances, however, reliance on advice from regulators
or consistent industry practice might accord with a reasonable inves-
tor’s expectations.
6 The hypothetical used earlier could demonstrate the same points.
Suppose the CEO, in claiming that her company’s TV had the highest
resolution available on the market, had failed to review any of her
competitors’ product specifications. Or suppose she had recently
received information from industry analysts indicating that a new
product had surpassed her company’s on this metric. The CEO may
still honestly believe in her TV’s superiority. But under §11’s omissions
provision, that subjective belief, in the absence of the expected inquiry
or in the face of known contradictory evidence, would not insulate her
from liability.
7 Omnicare contends at length that Virginia Bankshares forecloses
this result, see Brief for Petitioners 16–21, relying on the following
sentence: “A statement of belief may be open to objection . . . solely as a
misstatement of the psychological fact of the speaker’s belief in what he
says,” 501 U. S., at 1095. But Omnicare’s argument plucks that state-
Cite as: 575 U. S. ____ (2015) 13
Opinion of the Court
An opinion statement, however, is not necessarily mis-
leading when an issuer knows, but fails to disclose, some
fact cutting the other way. Reasonable investors under-
stand that opinions sometimes rest on a weighing of com-
peting facts; indeed, the presence of such facts is one
reason why an issuer may frame a statement as an opin-
ion, thus conveying uncertainty. See supra, at 6–7, 11.
Suppose, for example, that in stating an opinion about
legal compliance, the issuer did not disclose that a single
junior attorney expressed doubts about a practice’s legal-
ity, when six of his more senior colleagues gave a stamp of
approval. That omission would not make the statement of
opinion misleading, even if the minority position ulti-
mately proved correct: A reasonable investor does not
expect that every fact known to an issuer supports its
opinion statement.8
——————
ment from its context and thereby transforms its meaning. Virginia
Bankshares concerned an expression of opinion that the speaker did not
honestly hold—i.e., one making an “untrue statement of fact” about the
speaker’s own state of mind, §77k(a). See id., at 1090 (“[W]e interpret
the jury verdict as finding that the . . . directors did not hold the beliefs
or opinions expressed, and we confine our discussion to statements so
made”). The Court held that such a statement gives rise to liability
under §14(a) when it is also “false or misleading about its subject
matter.” Id., at 1096. Having done so, the Court went on to consider
the rare hypothetical case, described in this opinion’s second footnote,
in which a speaker expresses an opinion that she does not actually
hold, but that turns out to be right. See supra, at 8, n. 2. The sentence
Omnicare cites did no more than introduce that hypothetical; it was a
way of saying “someone might object to a statement—even when the
opinion it expressed proved correct—solely on the ground that it was
disbelieved.” And the Court then held, as noted above, that such an
objection would fail. See ibid. The language thus provides no support
for Omnicare’s argument here.
8 We note, too, that a reasonable investor generally considers the
specificity of an opinion statement in making inferences about its basis.
Compare two new statements from our ever-voluble CEO. In the first,
she says: “I believe we have 1.3 million TVs in our warehouse.” In the
second, she says: “I believe we have enough supply on hand to meet
14 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
Moreover, whether an omission makes an expression of
opinion misleading always depends on context. Registra-
tion statements as a class are formal documents, filed with
the SEC as a legal prerequisite for selling securities to the
public. Investors do not, and are right not to, expect opin-
ions contained in those statements to reflect baseless, off-
the-cuff judgments, of the kind that an individual might
communicate in daily life. At the same time, an investor
reads each statement within such a document, whether of
fact or of opinion, in light of all its surrounding text, in-
cluding hedges, disclaimers, and apparently conflicting
information. And the investor takes into account the
customs and practices of the relevant industry. So an
omission that renders misleading a statement of opinion
when viewed in a vacuum may not do so once that state-
ment is considered, as is appropriate, in a broader frame.
The reasonable investor understands a statement of opin-
ion in its full context, and §11 creates liability only for the
omission of material facts that cannot be squared with
such a fair reading.
These principles are not unique to §11: They inhere, too,
in much common law respecting the tort of misrepresenta-
tion.9 The Restatement of Torts, for example, recognizes
that “[a] statement of opinion as to facts not disclosed and
not otherwise known to the recipient may” in some cir-
cumstances reasonably “be interpreted by him as an im-
plied statement” that the speaker “knows facts sufficient
to justify him in forming” the opinion, or that he at least
——————
demand.” All else equal, a reasonable person would think that a more
detailed investigation lay behind the former statement.
9 Section 11 is, of course, “not coextensive with common-law doctrines
of fraud”; in particular, it establishes “a stringent standard of liability,”
not dependent on proof of intent to defraud. Herman & MacLean v.
Huddleston, 459 U. S. 375, 381, 388–389 (1983); see supra, at 2; infra,
at 15, n. 11. But we may still look to the common law for its insights
into how a reasonable person understands statements of opinion.
Cite as: 575 U. S. ____ (2015) 15
Opinion of the Court
knows no facts “incompatible with [the] opinion.” Re-
statement (Second) of Torts §539, p. 85 (1976).10 When
that is so, the Restatement explains, liability may result
from omission of facts—for example, the fact that the
speaker failed to conduct any investigation—that rebut
the recipient’s predictable inference. See id., Comment a,
at 86; id., Comment b, at 87. Similarly, the leading trea-
tise in the area explains that “it has been recognized very
often that the expression of an opinion may carry with it
an implied assertion, not only that the speaker knows no
facts which would preclude such an opinion, but that he
does know facts which justify it.” Prosser and Keeton
§109, at 760. That is especially (and traditionally) the
case, the treatise continues, where—as in a registration
statement—a speaker “holds himself out or is understood
as having special knowledge of the matter which is not
available to the plaintiff.” Id., at 760–761 (footnote omit-
ted); see Restatement (Second) of Torts §539, Comment b,
at 86 (noting that omissions relating to an opinion’s basis
are “particularly” likely to give rise to liability when the
speaker has “special knowledge of facts unknown to the
recipient”); Smith v. Land and House Property Corp.,
[1884] 28 Ch. D. 7, 15 (App. Cas.) (appeal taken from Eng.)
(opinion of Bowen, L. J.) (When “the facts are not equally
known to both sides, then a statement of opinion by the
one who knows the facts best . . . impliedly states that [the
speaker] knows facts which justify his opinion”).11
——————
10 The Restatement of Contracts, discussing misrepresentations that
can void an agreement, says much the same: “[T]he recipient of an
assertion of a person’s opinion as to facts not disclosed” may sometimes
“properly interpret it as an assertion (a) that the facts known to that
person are not incompatible with his opinion, or (b) that he knows facts
sufficient to justify him in forming it.” Restatement (Second) of Con-
tracts §168, p. 455 (1979).
11 In invoking these principles, we disagree with JUSTICE SCALIA’s
common-law-based opinion in two crucial ways. First, we view the
common law’s emphasis on special knowledge and expertise as support-
16 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
And the purpose of §11 supports this understanding of
how the omissions clause maps onto opinion statements.
Congress adopted §11 to ensure that issuers “tell[ ] the
whole truth” to investors. H. R. Rep. No. 85, 73d Cong.,
1st Sess., 2 (1933) (quoting President Roosevelt’s message
to Congress). For that reason, literal accuracy is not
enough: An issuer must as well desist from misleading
investors by saying one thing and holding back another.
Omnicare would nullify that statutory requirement for all
sentences starting with the phrases “we believe” or “we
think.” But those magic words can preface nearly any
conclusion, and the resulting statements, as we have
shown, remain perfectly capable of misleading investors.
See supra, at 11–12. Thus, Omnicare’s view would punch
a hole in the statute for half-truths in the form of opinion
statements. And the difficulty of showing that such
statements are literally false—which requires proving an
issuer did not believe them, see supra, at 7–8—would
make that opening yet more consequential: Were Omni-
care right, companies would have virtual carte blanche to
assert opinions in registration statements free from worry
——————
ing, rather than contradicting, our view of what issuers’ opinion state-
ments fairly imply. That is because an issuer has special knowledge of
its business—including the legal issues the company faces—not avail-
able to an ordinary investor. Second, we think JUSTICE SCALIA’s reliance
on the common law’s requirement of an intent to deceive is inconsistent
with §11’s standard of liability. As we understand him, JUSTICE SCALIA
would limit liability for omissions under §11 to cases in which a speaker
“subjectively intend[s] the deception” arising from the omission, on
the ground that the common law did the same. Post, at 6 (opinion
concurring in part and concurring in judgment) (emphasis deleted).
But §11 discards the common law’s intent requirement, making omis-
sions unlawful—regardless of the issuer’s state of mind—so long as
they render statements misleading. See Herman & MacLean, 459
U. S., at 382 (emphasizing that §11 imposes liability “even for innocent”
misstatements or omissions). The common law can help illuminate
when an omission has that effect, but cannot change §11’s insistence on
strict liability. See supra, at 14, n. 9.
Cite as: 575 U. S. ____ (2015) 17
Opinion of the Court
about §11. That outcome would ill-fit Congress’s decision
to establish a strict liability offense promoting “full and
fair disclosure” of material information. Pinter, 486 U. S.,
at 646; see supra, at 1–2.
Omnicare argues, in response, that applying §11’s omis-
sions clause in the way we have described would have
“adverse policy consequences.” Reply Brief 17 (capitaliza-
tion omitted). According to Omnicare, any inquiry into the
issuer’s basis for holding an opinion is “hopelessly amor-
phous,” threatening “unpredictable” and possibly “mas-
sive” liability. Id., at 2; Brief for Petitioners 34, 36. And
because that is so, Omnicare claims, many issuers will
choose not to disclose opinions at all, thus “depriving
[investors] of potentially helpful information.” Reply Brief
19; see Tr. of Oral Arg. 59–61.
But first, that claim is, just as Omnicare labels it, one of
“policy”; and Congress gets to make policy, not the courts.
The decision Congress made, for the reasons we have
indicated, was to extend §11 liability to all statements
rendered misleading by omission. In doing so, Congress
no doubt made §11 less cut-and-dry than a law prohibiting
only false factual statements. Section 11’s omissions
clause, as applied to statements of both opinion and fact,
necessarily brings the reasonable person into the analysis,
and asks what she would naturally understand a state-
ment to convey beyond its literal meaning. And for ex-
pressions of opinion, that means considering the founda-
tion she would expect an issuer to have before making the
statement. See supra, at 11–12. All that, however, is a
feature, not a bug, of the omissions provision.
Moreover, Omnicare way overstates both the looseness
of the inquiry Congress has mandated and the breadth of
liability that approach threatens. As we have explained,
an investor cannot state a claim by alleging only that an
opinion was wrong; the complaint must as well call into
question the issuer’s basis for offering the opinion. See
18 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
supra, at 11–12. And to do so, the investor cannot just say
that the issuer failed to reveal its basis. Section 11’s
omissions clause, after all, is not a general disclosure
requirement; it affords a cause of action only when an
issuer’s failure to include a material fact has rendered a
published statement misleading. To press such a claim,
an investor must allege that kind of omission—and not
merely by means of conclusory assertions. See Ashcroft v.
Iqbal, 556 U. S. 662, 678 (2009) (“Threadbare recitals of
the elements of a cause of action, supported by mere con-
clusory statements, do not suffice”). To be specific: The
investor must identify particular (and material) facts
going to the basis for the issuer’s opinion—facts about the
inquiry the issuer did or did not conduct or the knowledge
it did or did not have—whose omission makes the opinion
statement at issue misleading to a reasonable person
reading the statement fairly and in context. See supra, at
11–14. That is no small task for an investor.
Nor does the inquiry such a complaint triggers ask
anything unusual of courts. Numerous legal rules hinge
on what a reasonable person would think or expect. In
requiring courts to view statements of opinion from an
ordinary investor’s perspective, §11’s omissions clause
demands nothing more complicated or unmanageable.
Indeed, courts have for decades engaged in just that in-
quiry, with no apparent trouble, in applying the common
law of misrepresentation. See supra, at 14–15.
Finally, we see no reason to think that liability for
misleading opinions will chill disclosures useful to inves-
tors. Nothing indicates that §11’s application to mislead-
ing factual assertions in registration statements has
caused such a problem. And likewise, common-law doc-
trines of opinion liability have not, so far as anyone knows,
deterred merchants in ordinary commercial transactions
from asserting helpful opinions about their products. That
absence of fallout is unsurprising. Sellers (whether of
Cite as: 575 U. S. ____ (2015) 19
Opinion of the Court
stock or other items) have strong economic incentives to
. . . well, sell (i.e., hawk or peddle). Those market-based
forces push back against any inclination to underdisclose.
And to avoid exposure for omissions under §11, an issuer
need only divulge an opinion’s basis, or else make clear the
real tentativeness of its belief. Such ways of conveying
opinions so that they do not mislead will keep valuable
information flowing. And that is the only kind of infor-
mation investors need. To the extent our decision today
chills misleading opinions, that is all to the good: In enact-
ing §11, Congress worked to ensure better, not just more,
information.
B
Our analysis on this score counsels in favor of sending
the case back to the lower courts for decision. Neither
court below considered the Funds’ omissions theory with
the right standard in mind—or indeed, even recognized
the distinct statutory questions that theory raises. See
supra, at 4–5. We therefore follow our ordinary practice of
remanding for a determination of whether the Funds have
stated a viable omissions claim (or, if not, whether they
should have a chance to replead).
In doing so, however, we reemphasize a few crucial
points pertinent to the inquiry on remand. Initially, as we
have said, the Funds cannot proceed without identifying
one or more facts left out of Omnicare’s registration
statement. See supra, at 17–18. The Funds’ recitation of
the statutory language—that Omnicare “omitted to state
facts necessary to make the statements made not mislead-
ing”—is not sufficient; neither is the Funds’ conclusory
allegation that Omnicare lacked “reasonable grounds for
the belief ” it stated respecting legal compliance. App.
273–274. At oral argument, however, the Funds high-
lighted another, more specific allegation in their com-
plaint: that an attorney had warned Omnicare that a
20 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of the Court
particular contract “carrie[d] a heightened risk” of legal
exposure under anti-kickback laws. Id., at 225 (emphasis
omitted); see Tr. of Oral Arg. 42, 49; supra, at 4. On re-
mand, the court must review the Funds’ complaint to
determine whether it adequately alleged that Omnicare
had omitted that (purported) fact, or any other like it,
from the registration statement. And if so, the court must
determine whether the omitted fact would have been
material to a reasonable investor—i.e., whether “there is a
substantial likelihood that a reasonable [investor] would
consider it important.” TSC Industries, 426 U. S., at 449.
Assuming the Funds clear those hurdles, the court must
ask whether the alleged omission rendered Omnicare’s
legal compliance opinions misleading in the way described
earlier—i.e., because the excluded fact shows that Om-
nicare lacked the basis for making those statements that a
reasonable investor would expect. See supra, at 11–12.
Insofar as the omitted fact at issue is the attorney’s warn-
ing, that inquiry entails consideration of such matters as
the attorney’s status and expertise and other legal infor-
mation available to Omnicare at the time. See supra, at
13. Further, the analysis of whether Omnicare’s opinion is
misleading must address the statement’s context. See
supra, at 14. That means the court must take account of
whatever facts Omnicare did provide about legal compli-
ance, as well as any other hedges, disclaimers, or qualifi-
cations it included in its registration statement. The court
should consider, for example, the information Omnicare
offered that States had initiated enforcement actions
against drug manufacturers for giving rebates to pharma-
cies, that the Federal Government had expressed concerns
about the practice, and that the relevant laws “could “be
interpreted in the future in a manner” that would harm
Omnicare’s business. See App. 95–96, 136–137; supra, at 3.
Cite as: 575 U. S. ____ (2015) 21
Opinion of the Court
* * *
With these instructions and for the reasons stated, we
vacate the judgment below and remand the case for fur-
ther proceedings.
It is so ordered.
Cite as: 575 U. S. ____ (2015) 1
Opinion of SCALIA, J.
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–435
_________________
OMNICARE, INC., ET AL., PETITIONERS v. LABORERS
DISTRICT COUNCIL CONSTRUCTION INDUSTRY
PENSION FUND ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT
[March 24, 2015]
JUSTICE SCALIA, concurring in part and concurring in
the judgment.
Section 11 of the Securities Act of 1933 imposes liability
where a registration statement “contain[s] an untrue
statement of a material fact” or “omit[s] to state a material
fact necessary to make the statements therein not mis-
leading.” 15 U. S. C. §77k(a). I agree with the Court’s
discussion of what it means for an expression of opinion to
state an untrue material fact. But an expression of opin-
ion implies facts (beyond the fact that the speaker believes
his opinion) only where a reasonable listener would un-
derstand it to do so. And it is only when expressions of
opinion do imply these other facts that they can be “mis-
leading” without the addition of other “material facts.”
The Court’s view would count far more expressions of
opinion to convey collateral facts than I—or the common
law—would, and I therefore concur only in part.
The common law recognized that most listeners hear “I
believe,” “in my estimation,” and other related phrases as
disclaiming the assertion of a fact. Hence the (somewhat
overbroad) common-law rule that a plaintiff cannot estab-
lish a misrepresentation claim “for misstatements of
opinion, as distinguished from those of fact.” W. Keeton,
D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on
2 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of SCALIA, J.
Torts §109, p. 755 (5th ed. 1984) (Prosser & Keeton). A
fraudulent misrepresentation claim based on an expres-
sion of opinion could lie for the one fact the opinion reli-
ably conveyed: that the speaker in fact held the stated
opinion. Restatement of Torts §525, Comment c, p. 60
(1938). And, in some circumstances, the common law
acknowledged that an expression of opinion reasonably
implied “that the maker knows of no fact incompatible
with his opinion.” Id. §539(1), at 91. The no-facts-
incompatible-with-the-opinion standard was a demanding
one; it meant that a speaker’s judgment had to “var[y] so
far from the truth that no reasonable man in his position
could have such an opinion.” Restatement of Contracts
§474(b), p. 902, and Comment b (1932). But without more,
a listener could only reasonably interpret expressions of
opinion as conveying this limited assurance of a speaker’s
understanding of facts.
In a few areas, the common law recognized the possibil-
ity that a listener could reasonably infer from an expres-
sion of opinion not only (1) that the speaker sincerely held
it, and (2) that the speaker knew of no facts incompatible
with the opinion, but also (3) that the speaker had a rea-
sonable basis for holding the opinion. This exceptional
recognition occurred only where it was “very reasonable or
probable” that a listener should place special confidence in
a speaker’s opinion. Prosser & Keeton §109, at 760–761.
This included two main categories, both of which were
carve-outs from the general rule that “the ordinary man
has a reasonable competence to form his own opinion,” and
“is not justified in relying [on] the . . . opinion” of another.
Restatement of Torts §542, Comment a, at 95. First,
expressions of opinion made in the context of a relation-
ship of trust, such as between doctors and patients. Sec-
ond, expressions of opinion made by an expert in his ca-
pacity as an expert (for example, a jeweler’s statement of
opinion about the value of a diamond). These exceptions
Cite as: 575 U. S. ____ (2015) 3
Opinion of SCALIA, J.
allowed a listener to deal with those special expressions of
opinion as though they were facts. As the leading treatise
put it, “the ordinary man is free to deal in reliance upon
the opinion of an expert jeweler as to the value of a dia-
mond [or] of an attorney upon a point of law.” Prosser &
Keeton §109, at 761. But what reasonable person would
assume that a lawyer’s assessment of a diamond or a
jeweler’s opinion on a point of law implied an educated
investigation?
The Court’s expansive application of §11’s omissions
clause to expressions of opinion produces a far broader
field of misrepresentation; in fact, it produces almost the
opposite of the common-law rule. The Court holds that a
reasonable investor is right to expect a reasonable basis
for all opinions in registration statements—for example,
the conduct of a “meaningful . . . inquiry,”—unless that is
sufficiently disclaimed. Ante, at 12, 14–15, 18–20. Take
the Court’s hypothetical opinion regarding legal compli-
ance. When a disclosure statement says “we believe our
conduct is lawful,” ante, at 12, the Court thinks this
should be understood to suggest that a lawyer was con-
sulted, since a reasonable investigation on this point
would require consulting a lawyer. But this approach is
incompatible with the common law, which had no “legal
opinions are different” exception. See Restatement of
Torts §545, at 102.
It is also incompatible with common sense. It seems to
me strange to suggest that a statement of opinion as
generic as “we believe our conduct is lawful” conveys the
implied assertion of fact “we have conducted a meaningful
legal investigation before espousing this opinion.” It is
strange to ignore the reality that a director might rely on
industry practice, prior experience, or advice from regula-
tors—rather than a meaningful legal investigation—in
concluding the firm’s conduct is lawful. The effect of the
Court’s rule is to adopt a presumption of expertise on all
4 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of SCALIA, J.
topics volunteered within a registration statement.
It is reasonable enough to adopt such a presumption for
those matters that are required to be set forth in a regis-
tration statement. Those are matters on which the man-
agement of a corporation are experts. If, for example, the
registration statement said “we believe that the corpora-
tion has $5,000,000 cash on hand,” or “we believe the
corporation has 7,500 shares of common stock outstand-
ing,” the public is entitled to assume that the management
has done the necessary research, so that the asserted
“belief ” is undoubtedly correct. But of course a registra-
tion statement would never preface such items, within the
expertise of the management, with a “we believe that.”
Full compliance with the law, however, is another matter.
It is not specifically required to be set forth in the state-
ment, and when management prefaces that volunteered
information with a “we believe that,” it flags the fact that
this is not within our area of expertise, but we think we
are in compliance.
Moreover, even if one assumes that a corporation issu-
ing a registration statement is (by operation of law) an
“expert” with regard to all matters stated or opined about,
I would still not agree with the Court’s disposition. The
Court says the following:
“Section 11’s omissions clause, as applied to statements
of both opinion and fact, necessarily brings the reason-
able person into the analysis, and asks what she would
naturally understand a statement to convey beyond its
literal meaning. And for expressions of opinion, that
means considering the foundation she would expect an
issuer to have before making the statement.” Ante, at 17
(emphasis added).
The first sentence is true enough—but “what she [the
reasonable (female) person, and even he, the reasonable
(male) person] would naturally understand a statement [of
opinion] to convey” is not that the statement has the foun-
Cite as: 575 U. S. ____ (2015) 5
Opinion of SCALIA, J.
dation she (the reasonable female person) considers ade-
quate. She is not an expert, and is relying on the advice of
an expert—who ought to know how much “foundation” is
needed. She would naturally understand that the expert
has conducted an investigation that he (or she or it) con-
sidered adequate. That is what relying upon the opinion
of an expert means.
The common law understood this distinction. An action
for fraudulent misrepresentation based on an opinion of
an expert* was only allowed when the expression of the
opinion conveyed a fact—the “fact” that summarized the
expert’s knowledge. Prosser and Keeton §109, at 761.
And a fact was actionable only if the speaker knew it was
false, if he knew he did not know it, or if he knew the
listener would understand the statement to have a basis
that the speaker knew was not true. Restatement of Torts
§526, at 63–64. Ah!, the majority might say, so a speaker
is liable for knowing he lacks the listener’s reasonable
basis! If the speaker knows—is actually aware—that the
listener will understand an expression of opinion to have a
specific basis that it does not have, then of course he satis-
fies this element of the tort.
But more often, when any basis is implied at all, both
sides will understand that the speaker implied a “reason-
able basis,” but honestly disagree on what that means. And
the common law supplied a solution for this: A speaker was
liable for ambiguous statements—misunderstandings—as
——————
* At the time of the Act’s passage, the common law did not permit suit
for negligent misrepresentation under the circumstances here. An
action for negligent misrepresentation resting upon a statement of
opinion would lie only if the opinion—a professional opinion—was
“given upon facts equally well known to both the supplier and the
recipient.” Restatement of Torts §552, Comment b, at 123 (1938). That
is of course not the situation here. The typical opinion “given upon
facts equally known to both the supplier and the recipient” is a lawyer’s
legal advice on facts described by his client.
6 OMNICARE, INC. v. LABORERS DIST. COUNCIL
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Opinion of SCALIA, J.
fraudulent misrepresentations only where he both knew of
the ambiguity and intended that the listener fall prey to it.
Id. §527, at 66. In other words, even assuming both parties
knew (a prerequisite to liability) that the expression of
opinion implied a “reasonable investigation,” if the speaker
and listener honestly disagreed on the nature of that inves-
tigation, the speaker was not liable for a fraudulent misrep-
resentation unless he subjectively intended the deception.
And so in no circumstance would the listener’s belief of a
“reasonable basis” control: If the speaker subjectively be-
lieves he lacks a reasonable basis, then his statement is
simply a knowing misrepresentation. Id. §526(a), at 63. If
he does not know of the ambiguity, or knows of it, but does
not intend to deceive, he is not liable. Id. §527, at 66. That
his basis for belief was “objectively unreasonable” does not
impart liability, so long as the belief was genuine.
This aligns with common sense. When a client receives
advice from his lawyer, it is surely implicit in that advice
that the lawyer has conducted a reasonable investiga-
tion—reasonable, that is, in the lawyer’s estimation. The
client is relying on the expert lawyer’s judgment for the
amount of investigation necessary, no less than for the
legal conclusion. To be sure, if the lawyer conducts an
investigation that he does not believe is adequate, he
would be liable for misrepresentation. And if he conducts
an investigation that he believes is adequate but is objec-
tively unreasonable (and reaches an incorrect result), he
may be liable for malpractice. But on the latter premise
he is not liable for misrepresentation; all that was implicit
in his advice was that he had conducted an investigation
he deemed adequate. To rely on an expert’s opinion is to
rely on the expert’s evaluation of how much time to spend
on the question at hand.
The objective test proposed by the Court—inconsistent
with the common law and common intuitions about state-
ments of opinion—invites roundabout attacks upon ex-
Cite as: 575 U. S. ____ (2015) 7
Opinion of SCALIA, J.
pressions of opinion. Litigants seeking recompense for a
corporation’s expression of belief that turned out, after the
fact, to be incorrect can always charge that even though
the belief rested upon an investigation the corporation
thought to be adequate, the investigation was not “objec-
tively adequate.”
Nor is this objective test justified by §11’s absence of a
mens rea requirement, as the Court suggests. Ante, at 15
n.10. Some of my citation of the common law is meant to
illustrate when a statement of opinion contains an implied
warranty of reasonable basis. But when it does so, the
question then becomes whose reasonable basis. My illus-
tration of the common-law requirements for misrepresen-
tation is meant to show that a typical listener assumes
that the speaker’s reasonable basis controls. That show-
ing is not contradicted by §11’s absence of a mens rea
requirement.
Not to worry, says the Court. Sellers of securities need
“only divulge an opinion’s basis, or else make clear the
real tentativeness of [their] belief[s].” Ante, at 18. One
wonders what the function of “in my estimation” is, then,
except as divulging such hesitation. Or what would be
sufficient for the Court. “In my highly tentative estima-
tion?” “In my estimation that, consistent with Omnicare,
should be understood as an opinion only?” Reasonable
speakers do not speak this way, and reasonable listeners
do not receive opinions this way. When an expert expresses
an opinion instead of stating a fact, it implies (1) that
he genuinely believes the opinion, (2) that he believes his
basis for the opinion is sufficient, and (most important) (3)
that he is not certain of his result. Nothing more. This
approach would have given lower courts and investors far
more guidance and would largely have avoided the Funds’
attack upon Omnicare’s opinions as though Omnicare held
those opinions out to be facts.
I therefore concur only in part and in the judgment.
Cite as: 575 U. S. ____ (2015) 1
THOMAS, J., concurring in judgment
SUPREME COURT OF THE UNITED STATES
_________________
No. 13–435
_________________
OMNICARE, INC., ET AL., PETITIONERS v. LABORERS
DISTRICT COUNCIL CONSTRUCTION INDUSTRY
PENSION FUND ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT
[March 24, 2015]
JUSTICE THOMAS, concurring in the judgment.
I agree with the Court that the statements of opinion at
issue in this case do not contain an untrue statement of a
material fact. 15 U. S. C. §77k(a); ante, at 6–9. I write
separately because I do not think it advisable to opine, as
the majority does, on an additional theory of liability that
is not properly before us.
The question whether and under what circumstances an
omission may make a statement of opinion misleading is
one that we should have left to the lower courts to decide
on remand. As the majority acknowledges, that question
was never passed on below. See ante, at 19. With good
reason: Apart from a few conclusory allegations in their
complaint and some pro forma references to “misleading
statements and omissions” in their briefs, respondents did
not elaborate on the omissions theory of liability before
either the District Court or the Court of Appeals. They
certainly did not articulate the theory the majority now
adopts until they filed their merits brief before this Court.
And it was not until oral argument that they identified a
factual allegation in their complaint that might serve to
state a claim under that theory. See ante, at 19–20. This
delay is unsurprising given that, although various Courts
of Appeals have discussed the theory, they have been
2 OMNICARE, INC. v. LABORERS DIST. COUNCIL
CONSTR. INDUSTRY PENSION FUND
THOMAS, J., concurring in judgment
reluctant to commit to it. See MHC Mut. Conversion
Fund, L. P. v. Sandler O’Neill & Partners, L. P., 761 F. 3d
1109, 1116 (CA10 2014) (“[I]t is difficult to find many
[courts] actually holding a security issuer liable on this
basis, . . . and . . . the approach has been questioned by
others on various grounds”); see also ibid., n. 5.
We should exercise the same caution. This Court rarely
prides itself on being a pioneer of novel legal claims, as
“[o]urs is a court of final review and not first view.” Zivo-
tofsky v. Clinton, 566 U. S. ___, ___ (2012) (slip op., at 12)
(internal quotation marks omitted). Thus, as a general
rule, “we do not decide in the first instance issues not
decided below.” Ibid. (internal quotation marks omitted).
This includes fashioning innovative theories of liability as
much as it includes applying those theories to the circum-
stances of the case.
The Court has previously relied on a lower court’s fail-
ure to address an issue below as a reason for declining to
address it here, even when the question was fairly pre-
sented in the petition and fully vetted by other lower
courts. See, e.g., CSX Transp., Inc. v. Alabama Dept. of
Revenue, 562 U. S. 277, 284, n. 5 (2011); see also id., at
303, n. 3 (THOMAS, J., dissenting). Surely the feature that
distinguishes this case—a novel legal theory that is not
fairly included in the question presented—counsels more
strongly in favor of avoidance.
As JUSTICE SCALIA’s concurrence reveals, the scope of
this theory of liability is far from certain. And the highly
fact-intensive nature of the omissions theory provides an
additional reason not to address it at this time. The ma-
jority acknowledges that the facts a reasonable investor
may infer from a statement of opinion depend on the
context. And yet it opines about certain facts an investor
may infer from an issuer’s legal compliance opinion: that
such an opinion is based on legal advice, for example, or
that it is not contradicted by the Federal Government.
Cite as: 575 U. S. ____ (2015) 3
THOMAS, J., concurring in judgment
See ante, at 12. These inferences may seem sensible
enough in a vacuum, but lower courts would do well to
heed the majority’s admonition that every statement of
opinion must be considered “in a broader frame,” ante, at
14, taking into account all the facts of the statement and
its context. Would that the majority had waited for the
“broader frame” of an actual case before weighing in on
the omissions theory.