Introduction

On November 6, 2024, the Supreme Court heard oral argument in Facebook, Inc. v. Amalgamated Bank.[1] At issue was whether Facebook[2] plausibly misled investors when it failed to disclose in a Securities and Exchange Commission (SEC) filing that it knew Cambridge Analytica had improperly obtained data from millions of Facebook users. Two weeks later, on November 22, the Court issued a one-line order dismissing the writ of certiorari as improvidently granted, thereby declining to clarify how lower courts should evaluate misleading risk disclosures in SEC filings.[3] By issuing a “DIG” order,[4] a rarely used mechanism for dismissing a case, the Court effectively admitted that it never should have granted Facebook’s petition for certiorari in the first place. As a result, the Ninth Circuit’s decision, which allowed Amalgamated Bank’s shareholder class action lawsuit to proceed past a motion to dismiss, remained in effect.[5]

The Court did not provide any reasoning for its DIG order.[6] But the oral argument offers some clues, as the Justices struggled to define when a risk disclosure that omits a past occurrence of the risk-triggering event is misleading. The original question presented in Facebook’s petition was also different than the issue as framed by Facebook’s counsel, who arguably did not properly characterize the Ninth Circuit’s holding or the state of the law. Ultimately, the Court likely did not want to decide whether Facebook’s risk disclosures were misleading at the motion to dismiss stage without further evidence of what Facebook knew and when.

This Essay will: (I) summarize the factual background of the case and the Ninth Circuit’s decision; (II) describe the background legal framework that governs misleading disclosures in SEC forms; (III) discuss how the Justices failed to grasp the issues at oral argument; and (IV) explore why the Court may have dismissed Facebook’s writ of certiorari as improvidently granted.

I. Factual Background and Procedural History

This Part will summarize (A) the background of the Cambridge Analytica scandal; (B) the allegedly misleading statements in Facebook’s 2016 SEC risk disclosure; and (C) the procedural history of Amalgamated Bank’s shareholder class action suit against Facebook.

A. Factual Background

In December 2015, The Guardian reported that Cambridge Analytica, a British political consulting firm, had harvested data from Facebook users, created “psychographic profiles” of each user, and sold them to Ted Cruz’s 2016 presidential campaign.[7] The data was reportedly harvested from a personality quiz uploaded to Facebook by Cambridge Analytica researcher Aleksandr Kogan, who gained access to detailed data from users who completed the quiz as well as from their Facebook “friends.”[8] Kogan obtained data from at least thirty million Facebook users through this method.[9] He then trained an algorithm to generate “profiles” of each user based on the “big five” personality traits, and the Cruz campaign crafted targeted ads based on these profiles.[10]

In response to the 2015 Guardian story, Facebook said it was “carefully investigating” the situation and promised to take “swift action” against companies that improperly harvested user data.[11] Facebook asked Cambridge Analytica and Mr. Kogan to delete the data, which they agreed to do.[12] In June 2016, however, Cambridge Analytica CEO Alexander Nix refused to certify that all the data harvested from Facebook had been deleted.[13] And in October 2016, The Washington Post reported that Cambridge Analytica was still harvesting personality data and selling it to political campaigns, although the article did not state that the data came from Facebook.[14]

B. Facebook’s Statements

In an SEC filing in February 2017, Facebook represented the risk of improper third-party data access and misuse of user data as hypothetical without disclosing that Cambridge Analytica had already misused its user data.[15] In the “Risk Factors” section of its 2016 Form 10-K,[16] which requires disclosure of “material factors” that make an investment speculative or risky,[17] Facebook noted that “[a]ny failure to prevent or mitigate . . . improper access to or disclosure of our data or user data . . . could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position.”[18] Another statement noted that “if these third parties or developers fail to adopt or adhere to adequate data security practices . . . our data or our users’ data may be improperly accessed, used, or disclosed.”[19]

C. Procedural History

After reporting by The New York Times and The Guardian in 2018 revealed the full extent of Cambridge Analytica’s data harvesting—including the fact that the company had continued to harvest data and had not deleted the data it improperly collected in 2015—Facebook’s stock price plummeted.[20] This revelation prompted enforcement actions by the SEC[21] and the FTC,[22] as well as a shareholder class action lawsuit led by Amalgamated Bank.[23] The shareholder suit alleged, in relevant part, that Facebook misled investors in its 2016 Form 10-K by characterizing the risk of data misuse and improper access as “merely hypothetical” while failing to disclose that Cambridge Analytica had already improperly accessed and misused data in the past.[24]

The district court dismissed the complaint after three rounds of amendments, concluding that the plaintiffs failed to allege that Facebook made a false or misleading statement in its 2016 Form 10-K.[25] The court reasoned that the Cambridge Analytica scandal had been a matter of public knowledge for over a year and was not actively harming Facebook’s reputation by the time the form was filed in February 2017.[26] Furthermore, the court found that “investors would not have been misled” about the risk of data misuse and improper disclosure because that risk “had already been realized” when news of the scandal broke in 2015.[27]

A divided Ninth Circuit panel reversed in relevant part.[28] As the panel held, the plaintiff’s allegations, if true,[29] suggested that Facebook knew Cambridge Analytica’s misuse of user data in February 2017 was ongoing and that the Form 10-K “directly contradicted” this knowledge.[30] The panel reasoned that investors may not have had enough information to evaluate the risk of future harm because the full extent of the Cambridge Analytica scandal was not yet public.[31] In addition, the panel noted that a statement presenting the risk of future business harm or data misuse as purely hypothetical could be misleading “even if the magnitude of the ensuing harm was still unknown.”[32] In dissent, Judge Bumatay argued that the risk disclosures were not misleading because the plaintiffs did not allege that Facebook knew the data misuse had already resulted in business harm or that the risk of harm could immediately come to fruition.[33]

In its petition for a writ of certiorari, one of the questions Facebook presented for review was: “Are risk disclosures false or misleading when they do not disclose that a risk has materialized in the past, even if that past event presents no known risk of ongoing or future business harm?”[34] The Court granted certiorari on this question alone.[35] In its response brief, Respondents disputed this framing and agreed that the answer would be no.[36] Instead, they argued that the Cambridge Analytica scandal did, in fact, present a known risk of ongoing or future business harm at the time Facebook submitted its 2016 Form 10-K. Because they adequately alleged that Facebook knew about this risk in their complaint, Respondents argued that the Ninth Circuit correctly reversed the district court’s dismissal. By contrast, Facebook and amici maintained that the Ninth Circuit’s rule was an “outlier” that could lead to lengthy disclosures and “event driven litigation” whenever a past event results in harm to a business.[37]

II. Background

A company can be liable for securities fraud if it makes a false or misleading statement to the SEC. Section 10(b) of the Securities Exchange Act prohibits any “manipulative or deceptive” practice in connection with the purchase or sale of a security.[38] SEC Rule 10b-5 implements this provision and prohibits making “any untrue statement of a material fact” or omitting a “material fact necessary in order to make the statements made, in the light of the circumstances . . . not misleading.”[39] Private litigants can sue to enforce Rule 10b-5[40] and must allege: (1) a material misrepresentation or omission by the defendant (at issue here); (2) scienter; (3) a connection with the purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss causation.[41]

The SEC also requires publicly traded companies to file annual reports on Form 10-K.[42] As relevant here, Item 105 of SEC Regulation S-K requires this Form to include a section titled “Risk Factors” that describes “material factors that make an investment in the registrant or offering speculative or risky.”[43] However, the SEC Act does not “create an affirmative duty to disclose any and all material information,”[44] and the failure to disclose information is actionable only if the omission renders an affirmative statement misleading to a reasonable investor.[45] As the Supreme Court has recognized, the reasonable investor standard is inherently context-specific and “cannot be reduced to a bright-line rule.”[46] Several circuit courts have held that a past event is “material” and must be disclosed if the risk of harm from the event has already begun to materialize.[47]

In its petition for certiorari, Facebook emphasized a purported circuit split concerning the extent to which public companies must disclose past events in their Form 10-K filings.[48] According to Facebook’s characterization, the Ninth Circuit held that disclosures “must include past instances when risks came to fruition even if the company has no basis to believe those events will harm the business.”[49] This approach purportedly conflicted with the Sixth Circuit’s, which it claimed never requires disclosure of past events,[50] and six other circuits, which only require disclosure where the risk from the past event (a) has already materialized or (b) is “virtually certain” to materialize.[51] Respondents and government counsel challenged Facebook’s framing of the circuit split and the Ninth Circuit’s opinion, which in their view held that shareholders adequately alleged that the risk of harm from the Cambridge Analytica scandal had already materialized.[52]

III. The Court’s Confusion at Oral Argument

Over the course of two hours of oral argument, the Justices did not grapple with the circuit split that figured so prominently in Facebook’s certiorari petition. Instead, they repeatedly posed or considered hypotheticals aimed at delineating when a conditional “if-then” statement that fails to disclose a past occurrence of the risk-triggering “if” event is misleading. For example: Does a student mislead his parents when he says he “may fail an exam” if in fact he has already failed? Or does a realtor mislead his clients when he says home insurance “could become more expensive” if crime goes up without disclosing a string of recent burglaries?[53]

In their opening statements, each advocate posed a hypothetical designed to probe the Justices’ intuitions about when a bare conditional statement[54] is misleading. As Petitioner’s counsel Kannon Shanmugam argued, a bare statement that “the road may be flooded if it rains” is not misleading, even if it rained yesterday.[55] In contrast, Respondent’s counsel Kevin Russell posed the student hypothetical, arguing that the student’s statement about possibly failing the exam was misleading because his risk of failure had already materialized.[56] In a recurring hypothetical, Justice Kagan asked about a factory’s failure to disclose that a past fire limited production capacity, and Justice Alito asked whether the analysis would change if the fire were caused by a Molotov cocktail or “space junk that fell out of the sky, among other unpredictable events.”[57]

Absurd musings aside, the Justices seemed to realize by the middle of the argument that they could craft any number of hypothetical situations with bare conditional statements that fell on either side of the misleading line based on context.[58] As Justice Barrett noted, the line between a purely prospective “if-then” risk statement and a misleading omission that implies non-occurrence of a past triggering event is “not easily susceptible to a categorical rule.”[59] The Chief Justice and Justice Kavanaugh even suggested that the Court should not formulate a rule at all, given that the SEC is better positioned to clarify when an omission in a risk disclosure is misleading.[60]

The Justices also repeatedly expressed confusion about the question presented towards the end of the argument. After Mr. Russell stated that the Cambridge Analytica scandal was a “ticking time bomb” that Facebook knew would cause future harm, Justice Alito replied that this argument seemed “different from the one . . . presented by the question.”[61] Justice Kavanaugh later said that he thought the question presented was whether an omission of a past event was misleading “even though the harm from that event . . . is over.”[62] In response, Mr. Russell noted that this was “very different” from what the parties had been discussing.[63] Assistant to the Solicitor General Kevin Barber also argued that the original question presented did not accurately characterize the Ninth Circuit’s decision and that Petitioner’s counsel did not properly construe the virtual certainty test.[64]

By the end of oral argument, the Justices seemed unsure how craft a context-sensitive rule to define when a bare conditional risk statement in an SEC filing is misleading. Their hypotheticals emphasized the fact-bound nature of the inquiry, and their confusion about the question presented only added to the sense that they were shooting in the dark. Several commentators thought the Court would narrowly rule in favor of Facebook given the general skepticism of private securities fraud suits displayed by multiple conservative Justices.[65] But the Court decided to dismiss the writ of certiorari as improvidently granted instead, an unexpected but not unprecedented result for a case that prompted such confusion from the bench.

IV. Why the Supreme Court May Have DIGed Facebook 

Why did the Court dismiss Facebook’s writ of certiorari as improvidently granted rather than issue a decision on the merits? The Court’s one-line DIG order provided no reasoning, so any commentary on closed-door maneuvering is inherently speculative. But several factors may explain the Court’s decision to DIG: (1) the Court did not have enough facts about Facebook’s knowledge to decide whether its statements were misleading; (2) the Court may have realized that Facebook did not accurately characterize the Ninth Circuit’s decision and exaggerated a minor circuit split; or (3) the Court was unable to formulate a general rule to define misleading omissions and thought further commentary would not be helpful to the district court. By DIGing the case, the Court upheld the Ninth Circuit and allowed the shareholder class action to proceed against Facebook, thus placing the burden on the district court to decide the context-specific question of whether Facebook’s 2016 10-K statements were plausibly misleading.

The Supreme Court rarely dismisses writs of certiorari as improvidently granted. Empirical analysis indicates that between 1955 and 2005, the Court DIGed only two or three cases per term on average.[66] The sole DIG order of the 2023–24 term was in Moyle v. United States,[67] an unusual instance of the maneuver given the case’s public salience and the lengthy opinions filed by multiple Justices.[68] Of note, the Supreme Court issued a DIG order on December 11, 2024, in NVIDIA Corp v. E. Ohman J:or Fonder AB,[69] a similar securities fraud case about pleading standards and expert reports.[70] Given the Court’s shrinking merits docket in recent years,[71] these back-to-back DIGs raise questions about the Court’s case selection process and its ability to discern the certworthiness of petitions from large defendants in high-profile cases.

In a strange coincidence, Kevin Russell (Respondent’s Counsel) authored a blog post in 2019 describing three circumstances in which the Court often DIGs a case: (1) the Court discovers that the case is a poor vehicle for resolving the question presented; (2) the petitioners rely on a different argument than the one presented; or (3) the Court cannot reach a consensus and wants to avoid a fractured opinion.[72] All three circumstances appear to have been present to some extent in Facebook, contributing to the Court’s decision to dismiss as improvidently granted.

A. What did Facebook Know and When?

One of the fundamental disagreements between the parties at oral argument centered on how to characterize the risk posed to Facebook’s business by the Cambridge Analytica scandal. Was the scandal a discrete past event whose risk of harm had already materialized and fizzled by February 2017?[73] Or was it a “ticking time bomb” that Facebook knew would likely cause future harm if fully disclosed?[74] In other words, was the risk of business harm ongoing when Facebook issued its 2016 Form 10-K? The answer depends on what Facebook knew and when, specifically whether Facebook executives knew Cambridge Analytica’s data misuse was ongoing or whether they reasonably believed the scandal had passed.

Because Facebook appealed the Ninth Circuit’s decision reversing a motion to dismiss, the District Court did not make factual findings about what Facebook executives knew in February 2017. The Ninth Circuit only held that plaintiffs adequately pled that the risk of harm had already materialized because, among other allegations, Facebook knew Cambridge Analytica’s CEO had refused to certify that he deleted user data in June 2016.[75] The fact-specific nature of the misleading omissions inquiry and the procedural posture of this case made it a poor vehicle for the Court to decide a thorny question of securities law without further factual development.

B. Exaggerated Circuit Split and Flawed Question Presented

In its petition for certiorari, Facebook framed the Ninth Circuit’s decision as an “outlier” that would require companies to disclose past events even if they have no known risk of business harm.[76] This decision, in Facebook’s view, “exacerbated a deep and mature circuit split” regarding what information companies must disclose in SEC 10-K filings.[77] The Court was likely convinced to grant Facebook’s writ because the company’s high-profile Supreme Court attorneys framed the circuit split as particularly salient and ripe for resolution. Citing a circuit split is a reliable way to catch the attention of a Supreme Court clerk, even if “not all splits are created equal.”[78]

By DIGing the case, the Court may have realized upon further review that the purportedly “deep” circuit split was shallower than it first thought. As Respondents argued, the Ninth Circuit’s holding was consistent with the first prong of the “virtual certainty” test adopted by other circuits, namely that the omission of a past event in a risk disclosure can be misleading if the risk of harm had already materialized.[79] Several Justices also seemed surprised by Respondents’ challenge to the framing of the original question presented, and Petitioner’s counsel effectively agreed that the question was inapplicable.[80] Ultimately, the Court may have realized that it granted cert in the first place based on an exaggerated circuit split and with a question presented that failed to capture the Ninth Circuit’s decision.

C. Impossible to Formulate a General Rule

At oral argument, the Justices presented hypothetical scenarios that sought to define when bare conditional statements are misleading. But the wide range of hypotheticals underscored the challenge of formulating a general answer to such a context-specific question. By deciding to DIG the case, the Court likely realized that any “rule” it could have formulated would not have assisted the lower courts in answering whether the omission was material such that a reasonable investor was misled, which depends on evaluating what Facebook knew in February 2017 and the extent to which the Cambridge Analytica scandal was known to the public at that time.

The Court could have announced a narrow rule and remanded the case to the Ninth Circuit without deciding whether the rule applies to the facts below. A similar result happened last term in Macquarie v. Moab Partners: The Court held that “pure omissions” were not actionable but did not decide whether the case involved a pure omission or not.[81] But the Court here did not issue the narrow ruling that some commentators expected­­—instead, it ran up the white flag and admitted defeat in the face of a flawed question presented and a fundamentally factual dispute.

Conclusion

In Facebook v. Amalgamated Bank, the Supreme Court dismissed Facebook’s writ of certiorari as improvidently granted rather than clarifying the circumstances in which an omission in an SEC risk-disclosure statement is misleading. While no one knows why the Court DIGed the case, the lack of facts related to Facebook’s knowledge, the arguably false pretenses under which the case was brought, and the Justices’ inability to craft a general rule likely made the Court realize that it never should have heard the case in the first place.

As a result, Amalgamated Bank’s shareholder class action against Facebook will proceed in district court, allowing plaintiffs to discover crucial facts about what Facebook knew in February 2017. Alternatively, Facebook could settle the case rather than subject itself to fact discovery and further litigation. As Justice Kavanaugh put it at oral argument, prevailing at the motion to dismiss stage is often “the game” given the propensity of large defendants to settle fraud cases.[82] It remains to be seen how Facebook will handle this lawsuit. But the investors who felt misled by Facebook’s failure to disclose its knowledge of the Cambridge Analytica scandal in 2017 will finally get their day in court after over six years of amended complaints and waiting.

[1] 604 U.S. 4 (2024).

[2] In 2021, Facebook changed its name to “Meta Platforms.” Because the facts of this case took place before 2021, this Essay will refer to the company as Facebook.

[3] See Facebook, 604 U.S. at 4 (“The writ of certiorari is dismissed as improvidently granted.”).

[4] When the Supreme Court dismisses a writ of certiorari as improvidently granted (“DIGs”), it declines to reach the merits of the case and reverses its earlier decision to grant review, thus leaving in place the lower court decision as if it declined to grant review in the first instance.

[5] See In re Facebook, Inc. Sec. Litig., 87 F.4th 934 (9th Cir. 2023) (reversing the District Court’s decision that granted Facebook’s motion to dismiss Petitioner’s Third Amended Complaint in relevant part); In re Facebook, Inc. Sec. Litig., No. 18-cv-01725, 2021 WL 6000058 (N.D. Cal. Dec. 20, 2021).

[6] See Facebook, 604 U.S. at 4.

[7] See Harry Davies, Ted Cruz Using Firm That Harvested Data on Millions of Unwitting Facebook Users, Guardian (Dec. 11, 2015, 5:22 PM EST), https://www.theguardian.com/us-news/2015/dec/11/senator-ted-cruz-president-campaign-facebook-user-data.

[8] Id.

[9] In re Facebook Sec. Litig, 87 F.4th at 943; see Davies, supra note 7.

[10] See Davies, supra note 7. The “big five” traits are “openness, conscientiousness, extraversion, agreeableness, and neuroticism,” otherwise known as the “OCEAN scale.” Id. The OCEAN scale is a personality test that has been used in psychological research for decades. See Erin Brodwin, Here’s The Personality Test Cambridge Analytica Had Facebook Users Take, Bus. Insider (Mar. 19, 2018, 4:01 PM EDT), https://www.businessinsider.com/facebook-personality-test-cambridge-analytica-data-trump-election-2018-3 [https://perma.cc/K5Z3-L737].

[11] Id.

[12] See In re Facebook Sec. Litig., 87 F.4th at 943.

[13] Id. at 943–44.

[14] See Michael Kranish, Trump’s Plan for a Comeback Includes Building a ‘Psychographic’ Profile of Every Voter, Wash. Post (Oct. 27, 2016), https://www.washingtonpost.com/politics/trumps-plan-for-a-comeback-includes-building-a-psychographic-profile-of-every-voter/2016/10/27/9064a706-9611-11e6-9b7c-57290af48a49_story.html.

[15] See In re Facebook Sec. Litig., 87 F.4th at 944.

[16] The SEC’s Form 10-K is an annual filing that provides a comprehensive summary of a public company’s financial performance. See Form 10-K, Investor.gov: U.S. SEC, https://www.investor.gov/introduction-investing/investing-basics/glossary/form-10-k [https://perma.cc/3AZ3-CGTR] (last visited Jan. 27, 2025).

[17] 17 C.F.R. § 229.105(a).

[18] In re Facebook Sec. Litig., 87 F.4th at 944 (emphasis added).

[19] Id. at 948 (emphasis added).

[20] Id. at 945 (noting that Facebook’s stock price “dropped nearly 18%” in the week after the news reports and reflected a “loss of more than $100 billion in market capitalization”).

[21] Facebook agreed to settle a virtually identical lawsuit brought by the SEC in 2019 for $100 million. See Press Release, Securities and Exchange Commission, Facebook to Pay $100 Million for Misleading Investors About the Risks It Faced from Misuse of User Data (Jul. 24, 2019), https://www.sec.gov/newsroom/press-releases/2019-140 [https://perma.cc/ES58-SQ2Z].

[22] The FTC imposed a $5 billion penalty and new privacy requirements on Facebook in 2019 for violating a previous FTC order preventing consumer deception. See Press Release, Federal Trade Commission, FTC Imposes $5 Billion Penalty and Sweeping New Privacy Restrictions on Facebook (Jul. 24, 2019), https://www.ftc.gov/news-events/news/press-releases/2019/07/ftc-imposes-5-billion-penalty-sweeping-new-privacy-restrictions-facebook [https://perma.cc/DN97-F92C].

[23] See In re Facebook Sec. Litig., 87 F.4th at 945–46.

[24] See Third Amended Consolidated Class Action Complaint for Violations of the Federal Securities Laws at ¶ 527, In re Facebook, Inc. Sec. Litig., 477 F. Supp. 3d 980 (N.D. Cal. 2020) (No. 18-cv-01725). The complaint also alleged that Facebook made false statements about its investigation into Cambridge Analytica’s misconduct and about Facebook users’ control over their data. See In re Facebook, Inc. Sec. Litig., 87 F.4th 934, 946 (9th Cir. 2023). But these claims are not at issue here.

[25] See In re Facebook, Inc. Sec. Litig., No. 18-cv-01725, 2021 WL 6000058 (N.D. Cal. Dec. 20, 2021).

[26] In re Facebook Sec. Litig., 477 F. Supp. 3d at 1018.

[27] Id. at 1018–19.

[28] In re Facebook Sec. Litig., 87 F.4th at 941.

[29] Because the case was appealed at the motion to dismiss stage, the panel accepted all factual allegations in the complaint as true. See id. at 947–48.

[30] Id. at 949 (citing Glazer Cap. Mgmt., L.P. v. Forescout Techs., Inc., 63 F.4th 747, 764 (9th Cir. 2023)).

[31] See id. at 950.

[32] Id.

[33] See id. at 959–61 (Bumatay, J., concurring in part and dissenting in part).

[34] See Petition for Writ of Certiorari at i, Facebook, Inc. v. Amalgamated Bank, 144 S. Ct. 2629 (No. 23-980) (2024) (Mem.) (emphasis added).

[35] See Facebook, Inc. v. Amalgamated Bank, 144 S.Ct. 2629 (Mem) (Jun. 10, 2024) (No. 23-980).

[36] Brief for Respondents at 1, Facebook, 144 S.Ct. 2629 (“Respondents have never argued otherwise, and the Ninth Circuit held nothing to the contrary.”).

[37] See Brief for Petitioners at 33, Facebook, 144 S.Ct. 2629; Brief for Amici Curiae Law Professors and Former Officials of the Securities and Exchange Commission Supporting Petitioners at 3, Facebook, 144 S.Ct. 2629; For other amicus briefs, see, e.g., Brief for the Chamber of Commerce of the United States of America and the Securities Industry and Financial Markets Association as Amici Curiae Supporting Petitioner, Facebook, 144 S.Ct. 2629.

[38] 15 U.S.C. § 78j(b); In re Facebook Sec. Litig., 87 F.4th at 947.

[39] 17 C.F.R. § 240.10b-5.

[40]  See Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 165 (2008).

[41] See Facebook Sec. Litig., 87 F.4th at 947 (quoting In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046, 1052 (9th. Cir. 2014)). Private litigants are also subject to heightened pleading requirements under the Private Securities Litigation Reform Act and Federal Rule of Civil Procedure 9(b). But those provisions are not at issue here. See id. at 936.

[42] See 15 U.S.C. § 78m(a)(2); 17 C.F.R. § 229.

[43] 17 C.F.R. § 229.105(a).

[44] See Macquarie Infrastructure Corp. v. Moab Partners, L.P., 601 U.S. 257, 264 (2024).

[45] See Omnicare, Inc. v. Laborers Dist. Council Const. Ind. Pension Fund, 575 U.S. 175, 186–87 (2015). This inquiry is “objective” and depends on the “context” in which the affirmative statement is made. Id.

[46] Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 31.

[47] See, e.g., Karth v. Keryx Biopharmaceuticals, Inc., 6 F.4th 123, 138 (1st Cir. 2021); Williams v. Globus Med., Inc., 869 F.3d 235, 241 (3d Cir. 2017) (“[C]ourts are skeptical of companies treating as hypothetical . . . risks that have already materialized.”) (emphasis added); Rombach v. Chang, 355 F.3d 164, 173 (2d Cir. 2004) (“Cautionary words about future risk cannot insulate from liability the failure to disclose that the risk has transpired.”).

[48] See Petition for Writ of Certiorari at i, Facebook, Inc. v. Amalgamated Bank, 144 S. Ct. 2629 (No. 23-980) (2024) (Mem.).

[49] See id. at 18.

[50] See id. (citing Bondali v. Yum! Brands, Inc., 620 F. Appx 483, 491 (6th Cir. 2015)).

[51] See id. at 19–22 (citing cases from the First, Second, Third, Fifth, Tenth, and D.C. Circuits). See also Petition for Writ of Certiorari at i, Facebook, 144 S. Ct. 2629.

[52] See Brief in Opposition at 14–15, Facebook, 144 S.Ct. 2629; Transcript of Oral Argument at 103, Facebook, Inc. v. Amalgamated Bank, 604 U.S. 4 (2024) (No. 23-980) (Mem.) [hereinafter Oral Arg. Tr.] (“A risk statement can be false or misleading if… the risk has already materialized, which is our case . . . .”).

[53] See id. at 14.

[54] A “bare conditional statement” refers to an “if-then” statement that does not disclose past instances of the triggering “if” event, like Facebook’s risk disclosures described supra in Part I.B.

[55] Oral Arg. Tr., supra note 52, at 4.

[56] Id. at 51.

[57] Id. at 32, 86.

[58] See id. at 83 (noting that in determining when a bare conditional statement implies non-occurrence of a past event, “sometimes it’s yes, sometimes it’s no. It depends on the particular context.”);

[59] See id. at 41; see also id. at 42 (“Assume that I think the Ninth Circuit’s rule goes too far and I think your rule goes too far. It seems to me very hard to articulate what the line is.”) (emphasis added).

[60] See id. at 99 (“Why does the judiciary have to walk the plank on this . . . when the SEC could do it . . . ?”); id. at 84 (noting that the Court “may not do as good a job as the SEC” in providing guidance).

[61] Id. at 65–66.

[62] Id. at 78.

[63] Id.

[64] Id. at 81–82 (“There’s been some discussion about the question presented and the extent to which it accurately captures what the court of appeals held. We agree with Respondents that it does not.”); id. at 103 (“[T]he other circuits don’t apply the virtual certainty rule in the way that Petitioners say they do.”).

[65] See, e.g., Jessica Corso, Justices Eye Narrowing Disclosure Rules in Meta Investor Suit, Law360 (Nov. 6, 2024, 7:56 PM), https://www.law360.com/articles/2257282/justices-eye-narrowing-disclosure-rules-in-meta-investor-suit [https://perma.cc/X2GL-H6VM]; Hannah Webster, Supreme Court Questions Risk Disclosure Arguments in Facebook Case, UPI (Nov. 6, 2024, 3:25 PM), https://www.upi.com/Top_News/US/2024/11/06/us-supreme-court-risk-disclosure/9501730921424/ [https://perma.cc/ED7B-347M].

[66] See Michael E. Solimine & Rafael Gely, The Supreme Court and the DIG: An Empirical and Institutional Analysis, 2005 Wis. L. Rev. 1421, 1421 (2005).

[67] 603 U.S. 324 (2024) (Nos. 23-726, 23-727).

[68] See Wen W. Shen, Cong. Rsch. Serv., LSB11196, Supreme Court Allows Emergency Abortions in Idaho but Leaves Litigation Unresolved (2024), https://crsreports.congress.gov/product/pdf/LSB/LSB11196.

[69] 604 U.S. 20 (2024).

[70] For an explanation of NVIDIA and why the Court may have DIGed it, see Virginia Milstead & Mark Foster, The Supreme Court DIGs Securities Case, Leaving Important Questions Unanswered, Reuters (Jan. 6, 2025, 9:17 AM), https://www.reuters.com/legal/legalindustry/supreme-court-digs-securities-cases-leaving-important-questions-unanswered-2025-01-06/.

[71] See, e.g., Steve Vladeck, 98. Why is the Court’s Docket Shrinking?, One First (Sept. 9, 2024), https://www.stevevladeck.com/p/98-why-is-the-courts-docket-shrinking [https://perma.cc/T8J3-KDKQ].

[72] See Kevin Russell, Practice Pointer: Digging into DIGs, SCOTUSBlog (Apr. 25, 2019, 1:21 PM), https://www.scotusblog.com/2019/04/practice-pointer-digging-into-digs/ [https://perma.cc/7MLV-KVVT].

[73] See Oral Arg. Tr., supra note 52, at 31 (“[B]ecause we know that no harm occurred from the initial misuse of the data by Cambridge Analytica, this is an easy case even under [the virtual certainty test].”).

[74] See id. at 65.

[75] See In re Facebook, Inc. Sec. Litig., 87 F.4th 934, 949 (9th Cir. 2023),

[76] See Petition for Writ of Certiorari, supra note 34, at 26.

[77] Id. at 18.

[78] See Joseph A. Grundfest, Quantifying the Significance of Circuit Splits in Petitions for Certiorari: The Case of Securities Fraud Litigation, Rock Ctr. for Corp. Gov. (Mar. 20, 2024), https://securities.stanford.edu/academic-articles/20240320-quantifying-the-significance-of-circuit-splits-in-petitions-for-certiorari.pdf.

[79] See Oral Arg. Tr., supra note 64.

[80] See Oral Arg. Tr., supra notes 61–64.

[81] See Macquarie Infrastructure Corp. v. Moab Partners, L.P., 601 U.S. 257, 266 (2024).

[82] Oral Arg. Tr., supra note 51, at 78; See generally Kevin LaCroix, Predicting Securities Suit Case Outcomes, D&O Diary (May 2, 2012), https://www.dandodiary.com/2012/05/articles/securities-litigation/predicting-securities-suit-case-outcomes/ [https://perma.cc/3Z28-KLAJ] (presenting dismissal or settlement as a binary in the analysis of securities fraud class action outcomes).