Wochos v. Tesla, Inc.

985 F.3d 1180 (2021)

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Wochos v. Tesla, Inc.

United States Court of Appeals for the Ninth Circuit
985 F.3d 1180 (2021)

Facts

Tesla, Inc. (Tesla) (defendant) made various statements to Tesla’s investors in reports filed with the Securities and Exchange Commission (SEC) about the progress of Tesla’s production of electric vehicles. Between May and November 2017, Tesla reported cautious optimism that Tesla was on track to meet specific production goals by the year’s end but warned that potential delays existed due to certain risk factors. After Tesla failed to meet the production goals, Tesla’s stock price fell. Kurt Friedman and Uppili Srinivasan (the investors) (plaintiffs) filed a class action against Tesla on behalf of Tesla’s shareholders, claiming that Tesla committed securities fraud by making false and misleading public statements about Tesla’s production capacity. The investors alleged that, before making the public statements beginning in May 2017, Tesla knew that the production goals were not feasible. Tesla motioned to dismiss the complaint on the grounds that the investors failed to sufficiently plead that Tesla made any material misrepresentations of fact and that Tesla’s public statements were not actionable. The district court granted Tesla’s motion and dismissed the complaint. The investors appealed.

Rule of Law

Issue

Holding and Reasoning (Collins, J.)

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