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Facebook, Inc. v. Amalgamated Bank, No. 23-980
Argued on 2024-11-06.
For petitioners: Kannon K. Shanmugam, Washington, D. C. For respondents: Kevin K. Russell, Washington, D. C.; and Kevin J. Barber, Assistant to the Solicitor General, Department of Justice, Washington, D. C. (for United States, as amicus curiae.)
Question Presented:
This petition presents two important questions that have divided the federal courts of appeals. First , the circuits have split three ways concerning what public companies must disclose in the "risk factors" section of their 10-K filings. The Sixth Circuit holds that companies need not disclose past instances when a risk has materialized. The First, Second, Third, Fifth, Tenth, and D.C. Circuits hold that companies must disclose that a risk materialized in the past if the company knows that event will harm the business. The Ninth Circuit here adopted a third, outlier position requiring companies to disclose that a risk materialized in the past even if there is no known threat of business harm. Second , the circuits disagree on the proper pleading standard for the loss causation element of a private securities-fraud claim. The Fourth Circuit holds that loss causation allegations must satisfy Federal Rule 9(b)'s heightened pleading standard for fraud, while the Fifth and Sixth Circuits apply the ordinary Rule 8 standard. The Ninth Circuit here initially applied Rule 8, then substituted citations of Rule 9(b) without changing its analysis. The questions presented are: 1. Are risk disclosures false or misleading when they do not disclose that a risk has materialized in the past, even if that past event presents no known risk of ongoing or future business harm? 2. Does Federal Rule 8 or Rule 9(b) supply the proper pleading standard for loss causation in a private securities-fraud action?
Oral Argument Links:
Docket Links:
Chapters:
(00:00:00) Case Call
(00:00:04) ORAL ARGUMENT OF KANNON K. SHANMUGAM
(00:46:42) ORAL ARGUMENT OF KEVIN K. RUSSELL
(01:13:16) ORAL ARGUMENT OF KEVIN J. BARBER
(01:38:49) REBUTTAL ARGUMENT OF KANNON K. SHANMUGAM
Disclosure, Disclaimer, and Credits: