Opinion ID: 199400
Heading Depth: 2
Heading Rank: 4

Heading: The Allegedly Misleading Material Statements and the Alleged Material Omission

Text: 18 Although appellants made numerous claims of false and misleading statements by Micrion in their original complaint, by the time of summary judgment (and for purposes of this appeal), they pinpoint three particular statements and one alleged material omission. First, they claim that Economou's statement in the April 25 Release that Micrion had booked an order worth over $50 million was false and misleading because the term book an order refers only to orders where the customer was committed to purchasing the product ordered, i.e., firm orders. At the time that Micrion issued the press release, Read-Rite had only placed a firm order for 28 machines. The remainder of the machines were covered under a non-binding blanket order under which Micrion was obligated to sell up to 75 machines, but Read-Rite was not obligated to buy any for which it had not yet filed a written release. Under appellants' interpretation of book an order, Micrion had booked an order for under $30 million, not $60 million. 19 Second, appellants claim that Economou's inclusion of the entire Read-Rite order in actual backlog in the Conference Call was false and misleading because backlog only includes items for which a firm order had been placed, and not items covered under the non-binding blanket order. Under this interpretation, Micrion's backlog as of April 25, 1996 would have been approximately $40 million, rather than the $72 million stated in the Conference Call. 20 Third, appellants claim that Economou's statement that the rest of the order would certainly be shipped within twelve months of the Conference Call was false and misleading given that no specific delivery dates had been set for items under the non-binding blanket order, and that delivery for those items might never occur absent written purchase orders from Read-Rite. 21 Finally, even if none of these specific statements was false and misleading, appellants claim that Micrion's failure to disclose that Read-Rite had no obligation to purchase a majority of the equipment covered by the Agreement was a material omission actionable under Rule 10b-5. See, e.g., Roeder v. Alpha Indus., 814 F.2d 22, 26 (1st Cir. 1987) (citing SEC v. Tex. Gulf Sulphur Co., 401 F.2d 833, 860-61 (2d Cir.1968)) (When a corporation does make a disclosure ...there is a duty to make it complete and accurate.).