Opinion ID: 773420
Heading Depth: 3
Heading Rank: 1

Heading: Analysts' Statements

Text: 123 The first of these principles is the majority's implicit holding--it does not discuss the question in any detail but such a conclusion is necessary to its decision--that Vencor may be liable for statements made by analysts. Specifically, analysts' statements that management was comfortable with their projections. Our Circuit has not addressed the issue of whether a company's executives can be liable for statements of analysts, and while the majority opinion makes clear they can, it does little to explain why and how. As the majority gives no explanation, I suggest that the Second Circuit's position on the matter is persuasive. 124 In our original panel decision, relying on In re Time Warner, Inc., Securities Litig., 9 F.3d 259, 265 (2d Cir. 1993), we held a corporation cannot be held responsible for analysts' statements about the corporation's financial health unless the corporation takes more affirmative action than simply providing information to analysts. Helwig v. Vencor, 210 F.3d 612, 620-21 (6th Cir. 2000). Plaintiffs, in their briefs before this en banc panel, argue that holding oversimplified the Second Circuit's position. According to plaintiffs, the Second Circuit allows liability to attach when (1) management intentionally fostered a mistaken belief concerning a material fact that was incorporated into a report or (2) management adopted the report. I do not quarrel with that statement of Second Circuit law nor do I think it inconsistent with what we originally said. The complaint says that the analysts' report attributes statements to individuals; however, the text of the report makes clear that it does not. Nor does the report say that management even said it was comfortable with the projections. Rather, the report says, Management comfortable with EPS [estimates] . . . . We have been in contact with the company this week to review our models. J.A. at 856. Because the report does not indicate with whom the analysts spoke and does not attribute the statement to management, I do not think that the complaint meets the pleading requirement under the Second Circuit case law. See Novak v. Kasaks, 216 F.3d 300, 314 (2d Cir. 2000). As we said in the original panel opinion, analysts do not just regurgitate what management tells them, rather they do just what their title suggests: they analyze.