Plaintiffs’ federal securities law class action complaint alleged that defendant, a mining company, made false and misleading statements in press releases and quarterly statements concerning the viability of the restructuring of its North West Operations (NWO) in South Africa, which accounted for a significant part of its business. In granting defendants’ motion to dismiss the Consolidated Amended Complaint, with leave to replead, the District Court held that defendants’ optimistic statements were statements of “opinion and puffery” and therefore not actionable unless plaintiffs could prove knowledge of falsity when made.

Further, the Court rejected plaintiffs’ arguments that defendants knew, or should have known, that the restructuring could not possibly succeed based on “specific metrics and formulas” that they used to analyze the profitability of its mines because plaintiffs failed to establish in its pleading that defendants had any “actual reports” or “actual data” that indicated that the efforts to restructure the NWO could not succeed. Finally, the Court held that accounting errors which led to defendants’ restatement of the first three quarters of 2004 appeared to be a result of the negligence of inexperienced accounting personnel and did not rise to a level of recklessness that would create a strong inference of scienter.