October Term 2010 · Docket 09-1156
Does a single adverse report require a drug maker to disclose?
Investors sue a drug maker for hiding a single adverse report. The company argues the report lacked scientific proof.
Verified source milestones
- — An official oral-argument transcript was verified.
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
Mr. Frederick argued that materiality depends on the total mix of information.
Mr. Hacker stated that drug companies receive many anecdotal reports daily.
Mr. Shah argued that precedents require a meaningful alteration of the total mix.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 10, lines 5-13 — Transcript, file page 10, lines 5-13
- Official Supreme Court Transcript — file page 11, lines 9-27 — Transcript, file page 11, lines 9-27
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 3, lines 39-3 — Transcript, file page 3, lines 39-3
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 4, lines 29-33 — Transcript, file page 4, lines 29-33
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 5, lines 19-19 — Transcript, file page 5, lines 19-19
- Official Supreme Court Transcript — file page 5, lines 23-35 — Transcript, file page 5, lines 23-35
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
- Official Supreme Court Transcript — file page 58, lines 31-51 — Transcript, file page 58, lines 31-51
- Official Supreme Court Transcript — file page 59, lines 51-5 — Transcript, file page 59, lines 51-5
- Official Supreme Court Transcript — file page 6, lines 33-41 — Transcript, file page 6, lines 33-41
- Official Supreme Court Transcript — file page 7, lines 21-23 — Transcript, file page 7, lines 21-23
- Official Supreme Court Transcript — file page 7, lines 7-7 — Transcript, file page 7, lines 7-7
- Official Supreme Court Transcript — file page 8, lines 35-49 — Transcript, file page 8, lines 35-49
- Official Supreme Court Transcript — file page 8, lines 5-21 — Transcript, file page 8, lines 5-21
- Official Supreme Court Transcript — file page 9, lines 17-25 — Transcript, file page 9, lines 17-25
A citizen's guide to the whole case
What this case is about
This case tests when a company must disclose a single adverse report. The dispute centers on the legal standard for materiality in securities fraud.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
How the case got here
The Supreme Court heard oral argument in this case on January 10, 2011.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 59, lines 51-5 — Transcript, file page 59, lines 51-5
What each side wants
The company wants the Court to require proof of scientific significance before disclosure.
The investors want the Court to allow disclosure based on the total mix of information.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
What each side says
The company argues that a single report lacks scientific plausibility and is not material.
The investors argue that the total mix of information makes the report material to investors.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
What the justices asked
Justice Sotomayor asked if the source of the report changes its materiality.
Justice Kennedy asked if a baseless claim still requires disclosure if the market reacts.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 5-13 — Transcript, file page 10, lines 5-13
- Official Supreme Court Transcript — file page 11, lines 9-27 — Transcript, file page 11, lines 9-27
- Official Supreme Court Transcript — file page 3, lines 39-3 — Transcript, file page 3, lines 39-3
- Official Supreme Court Transcript — file page 4, lines 29-33 — Transcript, file page 4, lines 29-33
- Official Supreme Court Transcript — file page 5, lines 19-19 — Transcript, file page 5, lines 19-19
- Official Supreme Court Transcript — file page 5, lines 23-35 — Transcript, file page 5, lines 23-35
- Official Supreme Court Transcript — file page 58, lines 31-51 — Transcript, file page 58, lines 31-51
- Official Supreme Court Transcript — file page 59, lines 51-5 — Transcript, file page 59, lines 51-5
- Official Supreme Court Transcript — file page 6, lines 33-41 — Transcript, file page 6, lines 33-41
- Official Supreme Court Transcript — file page 7, lines 21-23 — Transcript, file page 7, lines 21-23
- Official Supreme Court Transcript — file page 7, lines 7-7 — Transcript, file page 7, lines 7-7
- Official Supreme Court Transcript — file page 8, lines 35-49 — Transcript, file page 8, lines 35-49
- Official Supreme Court Transcript — file page 8, lines 5-21 — Transcript, file page 8, lines 5-21
- Official Supreme Court Transcript — file page 9, lines 17-25 — Transcript, file page 9, lines 17-25
Why it matters
This case defines when companies must disclose adverse reports. It affects how investors evaluate drug company risks. It shapes the balance between scientific proof and market reaction.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 5-13 — Transcript, file page 10, lines 5-13
- Official Supreme Court Transcript — file page 11, lines 9-27 — Transcript, file page 11, lines 9-27
- Official Supreme Court Transcript — file page 3, lines 39-3 — Transcript, file page 3, lines 39-3
- Official Supreme Court Transcript — file page 3, lines 7-17 — Transcript, file page 3, lines 7-17
- Official Supreme Court Transcript — file page 4, lines 29-33 — Transcript, file page 4, lines 29-33
- Official Supreme Court Transcript — file page 5, lines 19-19 — Transcript, file page 5, lines 19-19
- Official Supreme Court Transcript — file page 5, lines 23-35 — Transcript, file page 5, lines 23-35
- Official Supreme Court Transcript — file page 58, lines 31-51 — Transcript, file page 58, lines 31-51
- Official Supreme Court Transcript — file page 59, lines 51-5 — Transcript, file page 59, lines 51-5
- Official Supreme Court Transcript — file page 6, lines 33-41 — Transcript, file page 6, lines 33-41
- Official Supreme Court Transcript — file page 7, lines 21-23 — Transcript, file page 7, lines 21-23
- Official Supreme Court Transcript — file page 7, lines 7-7 — Transcript, file page 7, lines 7-7
- Official Supreme Court Transcript — file page 8, lines 35-49 — Transcript, file page 8, lines 35-49
- Official Supreme Court Transcript — file page 8, lines 5-21 — Transcript, file page 8, lines 5-21
- Official Supreme Court Transcript — file page 9, lines 17-25 — Transcript, file page 9, lines 17-25
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
- Official Supreme Court Transcript — file page 3, lines 19-37 — Transcript, file page 3, lines 19-37
- Official Supreme Court Transcript — file page 30, lines 27-9 — Transcript, file page 30, lines 27-9
- Official Supreme Court Transcript — file page 48, lines 5-25 — Transcript, file page 48, lines 5-25
- Official Supreme Court Transcript — file page 57, lines 19-29 — Transcript, file page 57, lines 19-29
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.