On December 11, 2024, the United States Supreme Court issued a one-sentence decision dismissing the appeal—after having already heard oral argument—in a putative class action asserting claims under the Securities Exchange Act of 1934 against a technology company and certain of its officers.
NVIDIA Corp. v. E. Ohman J:or Fonder AB, No. 23-970. The Court’s order dismissed the writ of certiorari as “improvidently granted.”
Relevant to the appeal, plaintiffs alleged that (a) expert analysis revealed that defendants had materially understated the extent to which NVIDIA’s graphics processing units were purchased by the volatile cryptocurrency mining industry and (b) the company’s CEO had known of the misrepresentations because he received internal reports reflecting the truth. As discussed in prior posts, the
district court dismissed the case entirely and with prejudice, but the
Ninth Circuit, in a 2-1 decision, partially reversed, holding that plaintiffs adequately alleged that statements by two executives had been misleading, and adequately alleged scienter as to the company’s CEO. The Supreme Court
granted certiorari to address the following questions: “1. Whether plaintiffs seeking to allege scienter under the Private Securities Litigation Reform Act (“PSLRA”) based on allegations about internal company documents must plead with particularity the contents of those documents”; and “2. Whether plaintiffs can satisfy the PSLRA’s falsity requirement by relying on an expert opinion to substitute for particularized allegations of fact.” During
oral argument on November 13, 2024, multiple Justices expressed doubts as to whether the appeal presented legal issues warranting Supreme Court review or whether the appeal merely sought to change the result below.
The Supreme Court’s order leaves in place the Ninth Circuit’s ruling. The case will now return to the United States District Court for the Northern District of California for further proceedings.
This dismissal follows a similar recent post-oral argument
dismissal by the Supreme Court in another putative securities class action also involving a technology company.
Facebook v. Amalgamated Bank, No. 23-980. The result of that dismissal was to leave in place a decision by the Ninth Circuit, discussed in a
prior post.