Opinion ID: 2982900
Heading Depth: 2
Heading Rank: 3

Heading: January 30 FY 2011 Annual Report (Form 10-K)

Text: On January 30, the company filed its annual Form 10-K for the period ending December 31, 2011. The pension funds contend that the report contains two false statements. First, the pension funds challenge the statement: “The TEMPUR-Cloud® collection continues to be well received by retailers.” (R. 91-8, FY 2011 Form 10-K at 29, 38.) But they have not alleged facts that would plausibly render the “well received” statement misleading, and any evidence that four major Tempur-Pedic retailers decided to sell Serta’s iComfort has no bearing on their attitude toward Tempur-Pedic’s TEMPUR-Cloud® line. Second, the pension funds suggest that Tempur-Pedic spoke falsely when it claimed to “provide strong channel profits to our retailers and distributors which management believes will continue to provide an attractive business model for our retailers and discourage them from carrying competing lower-priced products.” (Id. at 38.) They argue that the statement, among others, “drew a false and misleading parallel between their successful results in 2011 and future results.” As noted above, the word “continue” renders the statement both a representation of current fact and a forward-looking projection. To the extent that the statement predicted how retailers might respond to incentives in the future, the pension funds have not argued that Tempur-Pedic failed to adequately warn investors of the risks underlying its channel-profit strategy. Further, to the extent the statement represents management’s current opinion, it is immaterial as a matter of law. The complaint includes no facts that would tend to show that management either did not believe that strong channel profits could have that effect or lacked a factual basis for that belief. See Helwig, 251 F.3d at 562 (“‘Material statements which contain - 13 - Case No. 14-5696 Pension Fund Grp. et al. v. Tempur-Pedic Int’l, Inc. et al. the speaker’s opinion are actionable . . . if the speaker does not believe the opinion and the opinion is not factually well-grounded.’” (quoting Mayer v. Mylod, 988 F.2d 635, 639 (6th Cir. 1993))).