On Aug. 13, a panel of the U.S. Court of Appeals for the Ninth Circuit issued an opinion in a securities fraud class action, Khoja v. Orexigen Therapeutics, No. 16-56069 2018 U.S. App. LEXIS 22371 (9th Cir. Aug. 13, 2018), which could dampen a defendant’s use of judicial notice and incorporation-by-reference to aid in its motion to dismiss, especially in the securities class action setting.

For private securities class actions under the Private Securities Litigation Reform Act (PSLRA), the pleading standard is heightened, see Tellabs v. Makor Issues & Rights, 551 U.S. 308, 313 (2007). The PSLRA requires that plaintiffs “specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.” Additionally, plaintiffs must “state with particularity facts giving rise to a strong inference that the defendant acted intentionally or recklessly,” 15 U.S.C. Section 78u-4.