# Slack Technologies v. Pirani

Note: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
SLACK TECHNOLOGIES, LLC, FKA SLACK TECHNOLOGIES, INC., ET AL. v. PIRANI CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 22–200. Argued April 17, 2023—Decided June 1, 2023
Held: Section 11 of the 1933 Act requires a plaintiff to plead and prove that he purchased securities registered under a materially misleading registration statement. The relevant language of §11(a) authorizes an individual to sue for a material misstatement or omission in a registration statement when the individual has acquired “such security.” Slack argues the term “such security” refers to a security issued pursuant to the allegedly misleading registration statement; Mr. Pirani says that the term may encompass a security not registered under an allegedly misleading registration statement. While the word “such” usually refers to something that has already been described, there is no clear referent in §11(a) defining what “such security” means. As a result, the Court must ascertain the statute’s critical referent “from the context or circumstances.”
Context provides several clues. First, the statute imposes liability for false statements or misleading omissions in “the registration statement.” §77k (emphasis added). The statute uses the definite article to reference the particular registration statement alleged to be misleading, and in this way seems to suggest the plaintiff must “acquir[e] such security” under that document’s terms. Ibid. In addition, the statute repeatedly uses the word “such” to narrow the law’s focus—for example, referring to “such part” of the registration statement that contains a misstatement or misleading omission—suggesting that when it comes to “such security,” the law speaks to a security registered under the particular registration statement alleged to contain a falsehood or misleading omission. Section 6 of the statute indicates that a registration statement is “effective” for “only … the securities specified therein,” which is also hard to square with Mr. Pirani’s reading. Damages caps in the statute also make less sense with Mr. Pirani’s account of the statute. Collectively, these contextual clues persuade the Court that Slack’s reading of the law is the better one. While direct listings like the one here are new, the Court’s conclusion is not. The majority of courts have for years held that §11(a) liability extends only to shares that are traceable to an allegedly defective registration.
13 F. 4th 940, vacated and remanded.
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