Facts versus opinions. A material misstatement of the former is the first and foremost requirement in claiming federal securities fraud; the latter, even if subsequently debunked, can never be the basis for such a serious charge. Yet while the nation’s highest court concisely articulated the differences between the two in, among other milestones, Omnicare, Inc. v. Laborers District Council Construction Industries Pension Fund, 575 U.S. 175 (2015) (“Omnicare”), the lower federal courts nonetheless continue to labor with distinguishing proscribed factual miscues from permissible utterances of opinion. Union Asset Management Holding AG v. Philip Morris International Inc. (In re Philip Morris International Inc. Securities Litigation), ___ F.3d ___ (No. 21-2546) (2d Cir. Dec. 26, 2023) (PMI), provides a cogent example.
In a case which the U.S. Court of Appeals for the Second Circuit labelled as presenting an issue of first impression, shareholders had alleged that a global purveyor of tobacco had materially misrepresented the results of its scientific research into smokeless alternatives.
