Thomas Carlyle famously called economics, the "dismal science". Sometimes, the law can be equally disheartening. Imagine trying to explain to a client that a statement that the company is "on track" to meet its projections might be within the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act while a statement that the company "believes that it is on track" might not. That, unfortunately, is the result according to Bielousov v. Gopro, Inc., 2017 U.S. Dist. LEXIS 117223 (N.D. Cal. 2017).
The plaintiffs in Bielousov alleged three categories of false and misleading statements. Today's blog focuses on the first category, statements allegedly made by GoPro's Chief Financial Officer, Brian McGee, in an investor call. According to the plaintiff, McGee's statements were false and misleading when made because GoPro was not then "on track" to reach the revenue guidance and McGee either did not believe his stated opinion or his opinion was misleading because he had not checked GoPro's real-time inventory and supply monitoring systems prior to speaking. Defendants move to dismiss the plaintiff's claims based on this statement, arguing that it falls within the protection of the PSLRA's "safe harbor" protecting forward-looking statements. 15 U.S.C. § 78u-5(c)(1).
Judge Claudia Wilken did not agree. Citing the U.S. Supreme Court's decision in Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, 135 S. Ct. 1318, 191 L. Ed. 2d 253 (2015), she concluded:
