In a detailed 74-page opinion yesterday, Judge Failla dismissed a securities fraud complaint against Chipotle arising from its alleged failure to properly disclose to investors various matters relating to the food-borne illness outbreaks that caused its stock to drop. She had dismissed an earlier version of the complaint last year, as we covered here.

Judge Failla ruled (among other things) that generalized statements in Chipotle’s filings about its commitment to food safety could not be the basis for fraud:

[T]he alleged misstatement provide that Chipotle’s “quality assurance department establishes and monitors [the Company’s] quality and food safety programs,” and that the Company’s “training and risk management departments develop and implement operating standards for food quality, preparation, cleanliness and safety.” But these statements are not demonstrably false: The SAC does not allege that Chipotle failed to undertake such endeavors, but merely that Chipotle failed to do so “adequately,” or that Chipotle “failed to live up to its own food safety standards,” or that Chipotle’s food-safety auditing system was “inherently deficient.” These allegations do not conflict with Defendants’ statements regarding the food-safety programs and procedures that Chipotle had in place, but merely quibble with Chipotle’s execution of those programs and procedures.

Judge Failla concluded the opinion by emphasizing that the mere fact that the company may have made mistakes does not mean that investors were defrauded (a point often made, see, e.g., here, in a case from Judge Forrest):

At its core, the SAC faults Defendants for failing to disclose duties they did not assume; for failing to be prescient; and for presenting accurate, but general, discussions of material risks rather than attempting the impossible task of outlining the myriad possible outcomes. The food-borne illness outbreaks were unfortunate, but whatever else they might reveal about Chipotle, they do not on this record reveal securities fraud.