What is it about Omnicare, Inc., that generates such awful judicial opinions? The Delaware supreme court's decision in Omnicare v. NCS Healthcare, 818 A.2d 914 (Del. 2003), was one of that Court's worst decisions.
And now in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, Justice Kagan gets off on the wrong foot with her very first sentence:
Before a company may sell securities in interstate commerce, it must file a registration statement with the Securities and Exchange Commission (SEC).
Granted, she recovered almost immediately by observing in the next paragraph that:
With limited exceptions not relevant here, an issuer may offer securities to the public only after filing a registration statement.
But, as a FB friend of mine observed, why didn't somebody correct the over broad opening sentence?
As for the merits of the decision, Richard Booth aptly observes that "The bottom line is that Omnicare resolves an issue that most thought settled already, while ignoring the standard(s) of care that remain applicable under the 1933 Act." Alison Frankel similarly noted that:
This is getting to be an annual rite. The U.S. Supreme Court agrees to take a case that could significantly reshape the securities class action business. Defendants get their hopes up, loading the docket with amicus briefs calling on the justices to impose new restrictions on the cases. But ultimately the justices leave the status quo more or less intact, to the relief of shareholder lawyers across the land.
Kevin LaCroix has a typically detailed and cogent analysis of the relevant legal issues on his blog. He also reprints a helpful Skadden client memo on the case.
