Opinion ID: 2982900
Heading Depth: 3
Heading Rank: 1

Heading: Statements about growth and competition

Text: Sarvary and Williams both spoke about the company’s recent successes during the call. For instance, Sarvary said: “Sales growth [in 2011] was strong, both in the U.S. and overseas, and we have gained share domestically and around the world.” (R. 91-15, Jan. 24, 2012 Earnings Call Tr. at 4.) Williams informed investors that the company “experienced improving growth rates by month” during the final quarter of 2011 and that “sales trends through the first - 10 - Case No. 14-5696 Pension Fund Grp. et al. v. Tempur-Pedic Int’l, Inc. et al. 23 days [of the first quarter of 2012] have continued to be strong.” (Id. at 7.) Later, he said: “We’re very pleased with how the business is performing . . . . Both the international business and the North American business are performing well but it’s early in the quarter and this can be a fluctuating industry so we don’t take 23 days lightly but we also don’t project it out forever.” (Id. at 10.) Although most of the analysts on the call asked about Tempur-Pedic’s recent performance and future plans, one asked whether Sarvary and Williams perceived a connection between competitors’ recent launches and the overall growth in consumer demand for memoryfoam mattresses. (Id. at 14–15.) Sarvary acknowledged that Tempur-Pedic operated in a “tough market with some very good competitors in it and they will continue to introduce products.” (Id. at 15.) He attributed both Tempur-Pedic’s recent successes and the increase in memoryfoam sales generally to “customers [who] are increasingly prepared to pay a premium for a product that will enable them to sleep better.” (Id.) The pension funds do not contend that Tempur-Pedic misstated its sales figures in 2011 or early 2012. Instead, citing the duty to “provide complete and non-misleading information with respect to subjects on which [one] undertakes to speak,” Helwig, 251 F.3d at 561, the pension funds argue that Williams and Sarvary misled investors by speaking about growth and competition without disclosing how Serta specifically affected Tempur-Pedic’s growth rate. They also contend that Sarvary’s response to the analyst’s question about competition falsely implied that Tempur-Pedic maintained a competitive edge over Serta. But we do not read Helwig to require Williams and Sarvary to disclose that TempurPedic’s sales might have grown more without competition from Serta’s iComfort once they chose to speak about the company’s recent positive results or competition generally. Holding an - 11 - Case No. 14-5696 Pension Fund Grp. et al. v. Tempur-Pedic Int’l, Inc. et al. earnings call did not obligate them to disclose all facts contributing to or undermining the company’s recent successes. “Such a rule would require almost unlimited disclosure on any conceivable topic related to an issuer’s financial condition whenever an issuer released any kind of financial data.” Miller, 346 F.3d at 682. 2. Statements forecasting that the current state of affairs would “continue” The pension funds also challenge Williams’s statement that Tempur-Pedic’s domestic business “will continue to perform” and Sarvary’s statement that the company would look “to capitalize on this fundamental trend [of consumers buying specialty mattresses] by continuing to have products that are both genuinely differentiated and preferred by consumers.” (R. 91-15, Jan. 24, 2012 Earnings Call Tr. at 9, 15.) To the extent that Williams and Sarvary’s statements predict that the current state of affairs will continue into the future, they are protected by the PSLRA safe harbor. See Miller, 346 F.3d at 677. At the beginning of the call, a Tempur-Pedic executive cautioned investors that any forward-looking statements, including financial projections, fell within the safe harbor, added that “economic, competitive, operating and other factors” could cause actual results to differ materially from projected results, and referred investors to the annual Form 10-K report discussed above. (R. 91-15, Jan. 24, 2012 Earnings Call Tr. at 3.) Those warnings meaningfully warned investors of the risks of purchasing Tempur-Pedic stock. Moreover, to the extent that Williams and Sarvary’s statements suggest that TempurPedic was currently “performing” and producing customer-preferred mattresses, such representations are the kind of “loosely optimistic” statements that we have elsewhere found immaterial. See City of Monroe, 399 F.3d at 670–72 (finding general claims about quality and - 12 - Case No. 14-5696 Pension Fund Grp. et al. v. Tempur-Pedic Int’l, Inc. et al. safety immaterial); Ford, 381 F.3d at 570–71 (finding self-praising statements about “quality, safety, and corporate citizenship” immaterial).