• Oregon District Court Grants Summary Judgment For Defendants Upon Motion For Reconsideration In Putative Class Action
   

  06/02/2021
  On May 24, 2021, United States Magistrate Judge Stacie F. Beckerman of the United States District Court for the District of Oregon granted summary judgment in favor of defendants upon a motion for reconsideration in a putative class action asserting claims under Section 10(b) of the Securities Exchange Act of 1934 against an industrial manufacturing company and certain of its executives.  Murphy v. Precision Castparts Corp., No. 3:16-CV-00521-SB, 2021 WL 2080016 (D. Or. May 24, 2021).  Plaintiffs primarily alleged that defendants made misrepresentations that the company remained on target to meet earnings projections.  The Court had previously granted summary judgment for defendants with respect to certain alleged misstatements, but had determined that certain statements regarding the company’s progress toward its projections contained an element of present fact and were therefore actionable.  On a motion for reconsideration based on the decision of the Ninth Circuit Court of Appeals in Wochos v. Tesla, Inc., 985 F.3d 1180 (9th Cir. 2021), the Court dismissed these remaining allegations, holding that the challenged statements did not contain the “concrete” description of present facts that is required for such statements to be actionable.
  
  The Court first explained that, in Tesla, the Ninth Circuit had concluded that various statements made by the company’s CEO that the company was “on track” to meet performance objectives and that the company was making “great progress” were either forward-looking statements protected by the safe harbor provision of the Private Securities Litigation Reform Act (“PSLRA”) or were otherwise too vague to be actionable.  Id. at *2-3.  The Court explained that the Ninth Circuit had determined that such statements were non-actionable because they did not include a “‘concrete description’ concerning the ‘past and present state’ of production”; thus, a general statement that a company is “on track” to meet projections is “forward-looking for the same reasons” as the original projections.  Id. at *4.
  
  The Court further explained that the challenged statements before it regarding the company’s performance targets — such as “we’re on that slope,” “we’re pretty much on that drum beat,” and “we hover around that line” — were indistinguishable from those in Tesla and did “not include sufficiently ‘concrete descriptions’ of present facts to fall outside the protection of the Safe Harbor.”  Id.  The Court also held that challenged statements that “the framework is intact” regarding the company’s projections could not “be false unless there was no longer any part of the framework intact.”  Id.
  
  While plaintiffs argued that the company’s statement that it had “actually hit certain intermediate benchmarks” constituted a “concrete factual assertion about a specific present or past circumstance,” the Court held that, under Tesla, such generic statements were too vague to be actionable because they did not identify any specific benchmark that had been reached.  Id.
  
  Because the Court had already held that plaintiffs failed to establish loss causation with respect to challenged statements other than those relating to the projections, the Court granted summary judgment for defendants on all of plaintiffs’ claims.  Id. at *5–6.
  CATEGORIES: Misstatement/Omission, Safe Harbor
  

LINKS & DOWNLOADS

• Murphy v. Precision Castparts Corp.