Omnicare, Inc. v Laborers District Council Construction Industry Pension Fund

Fund sued Omnicare alleging securities violations based on two statements of opinion that Omnicare complied with federal law. The district court granted judgment to Omnicare, but, the 6th Circuit reversed on the ground that objectively false opinions can form the basis of a securities violation claim. The Court, with one justice concurring in part and in judgment and one in judgment only, reversed. The majority held that the applicable statute, 15 USC 77k(a) limits liability to statements of fact and a company’s opinion that it complies with the law is not a statement of fact. The majority noted that if the company or its executive did not really believe what they were saying, that could serve as basis for a claim as it would have misrepresented the fact of belief in the opinion. However, that was not the case here. It held that omissions of certain factual basis for opinions may give rise to liability if an objective view of the facts demonstrates an investor would consider the omitted facts material. However, in the opinion context the relevant basis information are investigations undertaken or not and facts about the opinion known or not which will be difficult for a claimant to prove. The majority reasoned this approach is consistent with misrepresentation law generally and effectuates congressional intent. The case was remanded for an evaluation of whether an attorney warning to Omnicare should have been disclosed taking into account all the surrounding circumstances. Justice Scalia concurred in part and in judgment arguing claimants should be required to follow the common law rule and prove subjective intent to deceive by the person who states the opinion. Justice Thomas concurred in judgment arguing the omission theory of liability wasn’t raised below and should not be addressed.

B & B Hardware, Inc. v Hargis Industries, Inc.

B&B objected to Hargis’ trademark and sued in district court for infringement. The trademark appeals board ruled in B&B’s favor on likelihood on confusion. B&B sought to have the district court apply issue preclusion in the infringement case. The district court refused and the 8th Circuit affirmed. The Court, 7-2, reversed. It held that, under Court precedent, preclusive effect can be given to administrative adjudications if the issue is truly the same and if the other elements are met. Here, the controlling statute does not prohibit preclusion, its structure does not suggest preclusion is barred and proceedings before the board are sufficient to grant preclusive effect, the likelihood of confusion legal stand is the same in both proceedings and registrants have incentives to take objection proceedings seriously. The case was remanded for analysis under the correct legal rule. Justice Ginsberg added a concurrence noting board proceedings often look at marks in abstract while the litigation looks at the marks as used. Thus, preclusion may sometimes be unavailable. Justice Thomas, joined by Scalia, dissented arguing the rule about agency decisions is based on poorly reasoned dicta, should apply to statues enacted before it was adopted and the precedent raises significant separation of powers issues.