The Ninth Circuit, California appellate courts, and I are all back today after a long -- and well-deserved -- break. And a nice way to return is to read an opinion that is interesting, well-written, and seems right.
Like this one.
I think that Judge Wardlaw does a very good job here. It's the rare sitaution, in my view, when you're going to find a material misstatement in a public stock prospectus. It's even rarer when you're going to hold that there's liability notwithstanding the fact that those material statements are entirely accurate. And it borders on the inconceivable that you're going to conclude that the district court's finding that these literally true statements are not actionable is clearly erroneous.
But all of these things come together in this one.
It's an opinion worth reading, and is pretty darn succinct as well. I'll keep you in suspense regarding the exact nature of the statements here, since I think it helps to read them in context. Suffice it to say that I agree with Judge Wardlaw that there should be liability here, and would have -- respectfully -- reversed the district court as well.
I also agreed with her, by the way, that the loss causation issue should have been remanded, rather than adjudicated on appeal as an alternative basis to affirm. I think that loss causation is a tough issue here, and one on which plaintiffs might perhaps lose. Or at least fail to recover big (as opposed to little) money.
But that's a different issue. As to core liability, I do believe that there was an actionable material misstatement. Mind you, I understand why these misstatements were made. My strong sense is that they weren't deliberately misleading, and were instead the result of (terrible) strategic errors. But that still creates liability. So I agree with Judge Wardlaw.