Leidos, Inc. v. Indiana Public Retirement System

Case Updates

The U.S. Chamber filed an amicus brief urging the Supreme Court to reverse the Second Circuit’s decision holding that Item 303 of SEC Regulation S-K creates a duty to disclose that is actionable under Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5.

The Chamber’s brief argues that Item 303 provides a standard for disclosure that is too malleable and too deferential to impose an actionable duty under Rule 10b-5. The brief further argues that turning Item 303’s disclosure requirement into an actionable “duty” under Rule 10b-5 would inevitably trigger the “avalanche of information” that both the SEC and the Supreme Court have taken pains to prevent, would deprive investors of access to management’s perspective, and would leave companies exposed to nuisance lawsuits shaped by hindsight.

This brief was filed jointly with the Securities Industry and Financial Markets Association.

William M. Jay and Andrew Kim of Goodwin Procter LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.

The U.S. Chamber urged the Supreme Court to review a Second Circuit decision holding that Item 303 creates a “duty” to disclose that is actionable under Rule 10b-5. The Chamber’s brief argues that Item 303 is an inappropriate foundation for Rule 10b-5 liability because the breadth and amorphousness of Item 303’s reporting standards make it almost impossible in many instances to determine when management is obligated to make a disclosure. Allowing plaintiffs’ lawyers to litigate such judgment calls under Rule 10b-5 would create a severe penalty for making a wrong guess about the future.

This brief was filed jointly with the Securities Industry and Financial Markets Association.

William M. Jay and Andrew Kim of Goodwin Procter LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.