OPERS v. FHLMC -Northern District of Ohio at Youngstown
Split Score
What is a Split Score?
This score (0-100) indicates how likely this case is to be reviewed by the Supreme Court based on:
Case Summary
Disposition
Reversed in Part
The Sixth Circuit revived OPERS’s securities-fraud suit against Freddie Mac and its former executives. It held that the district court erred in denying class certification, striking the plaintiff’s expert, and granting summary judgment because the court wrongly rejected OPERS’s price-maintenance theory and misapplied market-efficiency and scienter standards. The panel reversed in part, vacated in part, and remanded for further proceedings, allowing OPERS to pursue claims based on alleged misstatements about Freddie Mac’s subprime and Alt-A exposure.
Circuit Split Identified
Legal Issue
Whether the PSLRA’s heightened “strong-inference” scienter standard that governs motions to dismiss also applies at the summary-judgment stage of a federal securities-fraud action.
Circuit Positions
PSLRA strong-inference scienter standard DOES NOT apply at summary judgment; ordinary Rule 56 standard governs.
PSLRA strong-inference scienter standard DOES apply at summary judgment; plaintiff must raise a strong inference of scienter to defeat summary judgment.
Conflict Summary
The First Circuit has required securities-fraud plaintiffs to produce evidence creating a strong inference of scienter at summary judgment, effectively importing the PSLRA pleading standard into Rule 56 analysis. The Seventh, Ninth, and Eleventh Circuits hold that the normal Rule 56 standard applies and that the strong-inference requirement is limited to the pleading stage. In this opinion, the Sixth Circuit (through Judge Thapar’s concurrence and the majority’s reversal of the district court for applying the strong-inference standard) aligns with the Seventh, Ninth, and Eleventh Circuits and rejects extending the heightened PSLRA standard to summary judgment.