From our private database of 12,700+ case briefs...
Tellabs, Inc. v. Makor Issues & Rights, Ltd.
United States Supreme Court
551 U.S. 308 (2007)
The Private Securities Litigation Reform Act of 1995 (PSLRA) imposes on private plaintiffs in securities litigation stricter pleading standards. Included in this standard is the requirement that a complaint contain particularly stated facts that would give a “strong inference” both that a fraud took place and that the defendant intended to defraud; a legal status referred to as scienter. Tellabs, Inc. (defendant) was a company in the business of manufacturing equipment for use in fiber optic networks. Tellabs was led by its CEO, Richard Notebaert (defendant). During the period from December 2000 to June 2001, Tellabs and Notebaert gave increasingly optimistic projections about Tellabs’ potential for growth as well as its current financial condition. These statements in some instances amounted to outright false statements as to earnings. Some of these statements were also alleged to have induced certain individuals to buy Tellabs stock, thereby becoming shareholders (plaintiff). Eventually, in June 2001, the true state of Tellabs’ financial health was made public. In December 2002, the shareholders filed a class action suit against Tellabs and Notebaert in the United States District Court for the Northern District of Illinois under SEC Rule 10b-5. Tellabs and Notebaert responded by making a motion to dismiss, arguing that the shareholders had not met the pleading standards articulated in the PSLRA. The district court agreed and dismissed the suit. The shareholders then filed an amended complaint containing additional and more particularized facts. The district court again dismissed, though this time with prejudice. The shareholders appealed and the United States Court of Appeals for the Seventh Circuit reversed the district court. Tellabs and Notebaert appealed.
Rule of Law
Holding and Reasoning (Ginsburg, J.)
Concurrence (Scalia, J.)
Concurrence (Alito, J.)
Dissent (Stevens, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 120,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 12,700 briefs, keyed to 172 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.