In two decisions last week - one in the Sixth Circuit and one in the First Circuit - federal appellate courts set aside lower court dismissals of securities class action lawsuits. Although the two cases are different and the two appellate opinions address different legal issues, the two decisions both seem to suggest a similar message to the lower courts to be a little less hasty in dismissing cases.
The Sixth Circuit opinion is particularly interesting, because the Court not only articulated a very precise (and plaintiff-friendly) standard for pleading strict liability in a Section 11 claim, but also expressly declined to follow the Second and Ninth Circuits on the Section 11 pleading requirements, setting up a split in the circuits that could attract the attention of the U.S. Supreme Court.
The Sixth Circuit Opinion
On May 23, 2013, a unanimous three-judge panel of the Sixth Circuit entered an opinion affirming in part and reversing in part the lower court's dismissal of a securities class action lawsuit against Omnicare and certain of its directors and officers [an enhanced version of the opinion is available to lexis.com subscribers]. As discussed here, the case has an extended procedural history, and the recent appeal represents the case's second trip to the Sixth Circuit.
Click here to read the entire post.
Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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