In a preview of the issues raised in Omnicare, Inc. v. The Laborers District Council Construction, No. 13-435 (discussed here and here), the Second Circuit in Kaess v. Deutsche Bank AG, No. 13-2364 (2d Cir. July 16, 2014) summarily affirmed dismissal of plaintiffs’ claims under the Securities Act of 1933, holding that plaintiffs were required to plead that statements of opinion were both subjectively and objectively false to be actionable.  Using the reasoning applied in Fait v. Regions Financial Corporation, 655 F.3d 105 (2d Cir. 2011), the court reasoned that Deutsche Bank’s alleged misstatements regarding trading exposure to mortgage-backed securities were statements of opinion:

With respect to the dismissal of the [Complaint], the district court was correct to hold that DB’s estimation of the extent of its investment in and exposure to residential mortgage-backed securities, as well as its statements about its Value-at-Risk metrics, amounted only to statements of opinion. See Fait at 655 F.3d at 110-11 (“Estimates of goodwill depend on management’s determination of the fair value of the assets acquired and liabilities assumed, which are not matters of objective fact. . . . In other words, the statements regarding goodwill at issue here are subjective ones rather than objective factual matters.”) (internal quotation marks and citations omitted).

The Kaess court’s decision highlights the circuit split on the question of whether Section 11 claims, which do not require a showing of scienter, still require a showing of subjective falsity for statements of opinion.  The Supreme Court is set to answer that question in Omnicare in the upcoming term.