Both sides got something to celebrate—and also plenty to complain about—in Tuesday’s U.S. Supreme Court ruling in Omnicare v. Laborers District Council Construction Industry Pension Fund.
Securities class action defendants everywhere can thank Kannon Shanmugam of Williams & Connolly for persuading the court that Omnicare Inc. can’t be held liable under Section 11 of the Securities Act of 1933 just because it offered opinions in a regulatory filing that later turned out to be incorrect. The justices unanimously rejected the position of plaintiffs counsel Thomas Goldstein of Goldstein & Russell, who argued that it didn’t matter whether Omnicare believed its own statements at the time, as long as the statements were false. (Omnicare told investors in 2005 that it “believed” its contracts with drug suppliers were lawful; two months later the company disclosed kickback allegations that ultimately cost it nearly $200 million in government settlements.)
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